June 12, 2008

 

US corn hits US$7.35, pushes other grains higher

 

US corn futures hit an all-time high on Wednesday (June 11, 2008) at US$7.35 after previous corn yield estimates of the USDA were dampened by wet weather.

 

It was the fifth trading day in a row that corn has hit a record high on fears that the US corn production will not meet the burgeoning demand due to adverse weather and sluggish pace of planting.

 

The rally also pushed prices of other grains such as soy and wheat.

 

On Tuesday (June 10, 2008), the USDA lowered its corn production estimate to 11.7 billion bushels, down from 12.1 billion in May and falling by 10 percent from the previous year's crop.

 

Nobuyuki Chino, president of Unipac Grain Ltd in Tokyo, said it has now become clear that 2008 corn yield will be insufficient.

 

Sean Corrigan, chief investment strategist at Diapason Commodities, said US corn futures could move towards US$8 a bushel and that the market did not seem ripe for a downward correction quite yet.

 

CBOT July 2008 corn futures contract was trading at US$6.83-1/2 per bushel, up from the previous day's close of US$6.73-1/4.

 

July soy futures contract gained 1.1 percent at US$14.63 per bushel, after closing the previous day at US$14.46-1/2.

 

July wheat futures contract was trading at US$8.17 per bushel, up from the previous day's close of US$8.09.

 

Meanwhile, EU's grain markets followed the US futures rally. The benchmark November wheat contract was up EUR6.75 or 3.5 percent at a session peak of EUR199 a tonne.

 

US$1 = EUR0.64 as of June 12, 2008