June 15, 2010

CBOT corn futures climb near two-week highs

Corn futures rallied Monday, climbing near two-week highs on fresh export demand, Chinese weather concerns and borrowed strength from other markets.

Nearby Chicago Board of Trade July corn settled at US$3.53 3/4 a bushel, up 4 1/4 cents, or 1.2%, and December corn ended 4 cents, or 1.1%, higher at US$3.75 a bushel. Speculative funds were estimated buyers of 6,000 lots in corn. Fund activity is a measure of investment money flow in the market.

The confirmation of new sales of US corn to China provided a fundamental boost to prices, with concerns that dry crop conditions in east-central China could raise the prospects for additional Chinese imports attracting buyers, according to analysts.

The USDA on Monday announced private export sales of 120,000 tonnes of corn for delivery to China in the 2009-10 marketing year.

The most-active July future was propelled by technical and speculative buying, as traders who had previously bet on prices trending lower on favourable crop conditions rushed to cover their positions.

The US$3.50-a-bushel level remains a psychological support point for corn, with new demand and borrowed strength from surging wheat and oat futures keeping sellers on the run, analysts said.

Meanwhile, a sinking US dollar and broad-based commodity gains provided outside support to keep buyers enthusiastic. However, advances were limited by the potential for record crops in the face of ideal weather.

The USDA is scheduled to issue its weekly crop progress report at 4 p.m. EDT. The good-to-excellent rating for US corn is expected to hold in a range 75-77% because of favourable weather, traders said.