April 25, 2012
Corn up on speculation of China buying more US grain
Speculation that China will buy more US grain to meet expanding demand for feed from hog producers made corn and wheat go up.
US exporters sold 120,000 tonnes of corn to unknown destinations for delivery after September 1, the USDA said Monday (Apr 23). China's state traders may buy US supplies if corn falls to US$5.50 a bushel, the China National Grain & Oils Information Centre said Monday (Apr 23). Before Monday, prices for delivery in December, after the US harvest, were down 8.4% this year to US$5.3675 a bushel in Chicago.
"The trade is looking for more sales to be announced to China," Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. "Imported US corn is competitive with supplies in China."
Corn futures for July delivery rose 1.6% to close at US$6.125 a bushel at 1:15 p.m. on the Chicago Board of Trade, after falling 8.4% the previous two weeks, the biggest such decline this year. On April 18, the price touched US$5.9175, the lowest for the most active contract since December 19.
Corn imports by China reached 472,026 tonnes in March, up from 2,340 tonnes a year earlier, according to an e-mailed statement from the customs agency Monday (Apr 23).
Temperatures will drop below freezing on April 30, following the cold weather earlier this month, threatening to damage crops in parts of the southern Mississippi River Valley and the eastern Midwest, Henderson said.
Wheat futures for July delivery rose 1.5% to US$6.325 a bushel on the CBOT, the second gain in three sessions. On April 18, the most-active contract touched US$6.0925, the lowest since January 20.
Corn is the biggest US crop, valued at US$76.5 billion in 2011, government figures show. Wheat was the fourth-largest after soy and hay.
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- Cuts in US corn, soybean outputs expected in upcoming USDA report