January 25, 2012

For a third day in Chicago, wheat and corn rose on stronger demand for exports from the US.

US export sales of corn and soy both more than doubled in the week ended January 12 from the prior period, government figures released on January 20 showed. Wheat sales climbed 33%.

"The very good export figures for the US allow for price consolidation in Chicago and for some optimism among the operators with regards to the real impact of the crisis on commodity demand," Paris-based farm adviser Agritel wrote in a market report today.

Wheat for March delivery advanced 1.3% to US$6.1825 a bushel on the Chicago Board of Trade. Milling wheat for March delivery traded on NYSE Liffe in the French capital rose 1.4% to EUR201.25 (US$262) a tonne.

"We did see a relatively solid result in terms of US export sales," Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney. "That is raising hopes out there that demand for US grains and oilseeds may prove a little stronger in the first quarter."

Corn for March delivery gained 1.3% to US$6.195 a bushel. Soy for March delivery increased 1.4% to US$12.035 a bushel. Areas of Argentina may get as much as 2.5 inches of rain by today, while storms might bring as much as one inch to parts of Brazil, forecaster Telvent DTN said in a report on January 20.

"The market continues to watch South American weather," Mathews said. "Conditions do look as though they are quite conducive to crop development."