CBOT corn futures rebound on weather speculation

CBOT corn futures rebounded from a five-week low on speculation that warm, dry weather may reduce crop yields in China, the world's biggest grower and consumer after the US.

Central China will remain dry through June 6 before light rains ease crop stress caused by two weeks of hot, dry weather. A dry spell returns June 11 and may significantly reduce soil moisture, the forecaster said. Drought eroded China's crop last year, leading to the country's first imports from the US in four years.

"The dry weather in China is going to support prices until widespread rains develop," said Jason Ward, a market analyst for Northstar Commodity Investment Co. in Minneapolis. "People are looking for confirmation of more Chinese purchases of US corn."

Corn futures for July delivery rose 3.25 cents, or 0.9%, to US$3.5725 a bushel at 10.09 a.m. yesterday (June 2) on the Chicago Board of Trade, after touching US$3.525, the lowest price for a most-active contract since April 27. Before today, corn fell 15% in 2010 as US farmers accelerated planting of this year's crop, boosting the yield potential.

China, the world's most-populous nation, may require "large-scale" imports of US corn if the domestic harvest falls this year, Fei Zhonghai, an assistant to the general manager at Cofco Ltd., said last week. The last time China was a net importer of corn was 1996, based on data from the US Department of Agriculture.

Corn is the biggest crop in US, valued at US$48.6 billion in 2009.