June 22, 2011

CBOT corn gains as flooding threatens China harvest

CBOT corn advanced for a third day on signs that last week's slump to its lowest price in three months lured buyers, and on concerns that rains may flood recently planted crops in central China, the world's second-largest consumer of the grain.

Corn inspected for export at ports in the US, the world's largest shipper, climbed 21% to 43 million bushels in the week ended June 16, the USDA said. Severe flooding will persist in the Yangtze River valley, threatening corn, soy, and winter-wheat planted areas, Telvent DTN Inc. said in a June 20 forecast.

Corn for December delivery gained 8.5 cents, or 1.3%, to US$6.69 a bushel at 11:01 a.m. London time on the Chicago Board of Trade. A close at that price would be the biggest gain since June 9.

The Korea Corn Processing Industry Association issued a tender to buy 55,000 tonnes of corn for food production to arrive by October 15, according to a tender notice to suppliers.

Investors are also closing bets on price declines on concern the tight supply situation for corn will support prices, Emori said. Global corn stockpiles in the 2011-12 marketing year were estimated to fall to about 47 days of demand, the smallest since 1974, according to USDA data.

Soy for November delivery gained 11.5 cents, or 0.9%, to US$13.47 a bushel in Chicago. Futures have surged 43 % in the past year partly on demand from China.

Wheat for September delivery in Chicago climbed 5.75 cents, or 0.8 %, to US$7.015 a bushel, the first gain in six sessions. Milling wheat for November delivery was little changed at EUR211.50 (US$302.91) a tonne.