April 4, 2011

 

CBOT corn attains highest price

 

 

CBOT corn rallied to the peak since 2008 on the apprehension that a planned increase in planting in the US, the world's biggest grower, will be insufficient to rebuild global stockpiles.

 

May-delivery corn surged as much as 1.2% to US$7.445/bushel, the highest price for a most-active contract on CBOT since July 2008, when a global food crisis helped send prices to record and spurred riots worldwide. Corn hit an all-time high of US$7.9925 on June 27, 2008.

 

US stockpiles on March 1 dropped to 6.52 billion bushels, the lowest level for that date since 2007, the USDA said on March 31. US farmers will expand corn sowing to 92.178 million acres this year, the second-largest area since 1944.

 

 

23 out of 29 traders and analysts surveyed said that corn will advance this week. The US harvest represents about 39% of global output in the 2010-11 season, according to USDA data.

 

Corn has more than doubled over the past year, beating rallies in wheat and soy, as increased demand has cut stockpiles. The May-delivery contract traded at US$7.4425/bushel. On April 1, futures jumped 6.2%, the biggest gain since June 30.

 

Wheat for May delivery gained as much as 1.3% to US$7.695/bushel on CBOT before trading at US$7.67. The price has increased 64% over the past year.

 

Drier and warmer temperatures are expected in the southern plains in the US this week, increasing stress to wheat development, according to the weather forecast.

 

"The increase in wheat prices is driven by the lack of rain in the winter-wheat areas in the US, particularly the hard-red winter wheat," the analyst said.

 

May-delivery soy rose 0.5% to US$14.01/bushel on CBOT, after gaining as much as 0.7% earlier. The oilseed has climbed 50% over the past year.