May 7, 2010

US high corn prices reflect brisk demand

Corn prices in the US have been favourable to producers to market more corn during the 2010 planting season.

On April 30, the CME Group exchange closed with July at US$3.75 1/2, September at US$3.84, December at US$3.92, March 2011 at US$4.05, and May 2011 at US$4.13 per bushel. Compared with prices in mid-April, the futures closed US$0.01-US$0.03 higher.

According to Ron McDaniel of Abbott Futures, housed at the Minneapolis Grain Exchange, the corn market experienced a reversal bottom by making new lows.

"It's called an end-around," McDaniel said. "It's a very potentially positive technical development in the corn. You're going to see targets up around US$3.90-US$4 on July corn, and maybe pushing US$4.15 in December corn."

Traders are also considering the possibility that China may purchase more corn. The USDA announced 115,000 tonnes (4.5 million bushel) sale of corn to China on April 29.

The USDA also announced US corn weekly export sales of 1.2 million tonnes (47.2 million bushels) for the 2009 corn crop and 202,000 tonnes (7.9 million bushels) for the 2010 crop.

Corn sales for exports have topped 1 million tonnes four weeks in a row.