CBOT corn, soy futures rise as China increases imports

US corn futures rose for a third time last week and soy gained after the US government reported increased export sales of the feed grains to China.

China purchased 118,000 tonnes of corn for delivery before August 31 and 120,000 tonnes of soy for delivery after the start of the harvest on September 1, the USDA said on Friday (May 21). China will sell more state-owned corn inventories to halt a rise in domestic prices as speculation of shortages grows.

"The Chinese corn and soy demand story will continue to support the markets," said Don Roose, the president of US Commodities Inc. in West Des Moines, Iowa. "No one knows how much more they will buy, and that will keep a bid under the market."

Corn futures for July delivery rose 6.5 cents, or 1.8%, to US$3.685 a bushel on May 21 at 10:34 a.m. on the Chicago Board of Trade, erasing an earlier decline of 0.8%. On May 19, the commodity touched US$3.535, the lowest level for most-active contract since April 27.

Soy futures for July delivery rose 4 cents, or 0.4%, to US$9.48 a bushel in Chicago. The commodity touched US$9.31 on May 20, the lowest level for the most-active contract since March 31.

Demand for corn and soy in China, the world's biggest consumer of grain and meat, will climb as an expanding economy boosts incomes and alters diets, said an executive at Cargill Inc., the largest US agricultural company.

Corn futures on China's Dalian Commodity Exchange jumped 18 % in the past year after drought reduced last year's harvest.

The US sold 478,462 tonnes of soy during the week ended May 13, double the average from the prior four weeks, the USDA said. Of the total, 60,000 tonnes were purchased by China.