May 16, 2012

US corn futures rise after seven-month drop

US corn futures increased after the drop to a seven-month low last week improved the appeal of the US grain to importers and investors.

July-delivery corn rose as much as 0.9% to US$5.86 a bushel on the CBOT, rebounding from the May 11 low of US$5.7225, which equalled the intraday low for the most- active contract on Oct. 3. It traded at US$5.8125 at 3:01 p.m. Singapore time, snapping three days of losses. Futures fell 6.3% last week, the most since the five days ended Jan. 13.

Exporters in the US, the world's largest grower, sold 300,000 tonnes of corn to unknown destinations, including 60,000 tonnes for delivery by August 31, and the rest for shipment in the following 12 months, the Department of Agriculture said May 11. Futures tumbled last week after the agency said May 10 that US reserves may total 851 million bushels before this year's harvest, 12% more than analysts had expected.

"The fall in corn was dramatic," Michael Creed, an agribusiness economist at National Australia Bank Ltd., said by phone from Melbourne. "That pace of decline tends to stoke demand."

Wheat for delivery in July gained as much as 0.7% to US$6.01 a bushel, after posting a second weekly loss in the five days ended May 11. It last traded at US$5.99 a bushel.

Soy for July delivery lost as much as 1.5% to US$13.8525 a bushel, the lowest price for the most-active contract since March 30. It traded at US$13.8525 after declining 4.9% last week, the biggest weekly loss for the most-active contract since the five days ended November 25.