CBOT corn futures rise on speculation that China will import more US grain

Corn futures rose for a second time this week on speculation that China may need more supplies from the US to reduce record domestic prices.

China, the world's biggest pork producer, may have issued more import permits to meet a feed-grain shortage, according to analysts.

China has ordered almost one million tonnes and will probably buy more, Alvaro Cordero, the manager of international operations-marketing at the US Grains Council, said on May 24. Total purchases for a 12-month period would be the biggest in 14 years.

"Rising Chinese demand is a big deal," said Charlie Sernatinger, a vice president for Fortis Clearing Americas LLC in Chicago.

Corn futures for July delivery rose 5.5 cents, or 1.5%, to US$3.6975 a bushel on May 26 at 10:12 a.m. on the Chicago Board of Trade, after falling 1.8% Tuesday (May 25) on speculation that a faltering global recovery would reduce food and feed demand. On May 19, the commodity touched US$3.535, the lowest level for the most-active contract since April 27.

China is allowing private feed and food makers to import as much as 2.8 million tonnes of corn this year, Zeng Liying, the deputy director of the State Administration of Grain, said earlier this week at a conference in Beijing.

The world's most-populous nation may require "large- scale" imports of US corn if the domestic harvest falls this year after spring planting was delayed, Fei Zhonghai, an assistant to the general manager at Cofco Ltd., said this week.

China has purchased more than 600,000 tonnes of US corn in the past month, according to the USDA. The last time China was a net importer of corn was 1996, based on USDA data.