August 6, 2010

US corn futures rise to 13-month high

Corn futures surged to 13-month high and soy extended a rally to the highest price since January after Russia halted grain exports for the rest of the year, following the worst drought in at least five decades.

The ban applies to shipments that do not clear customs by August 15, including signed contracts, a spokesman for Prime Minister Vladimir Putin said. Corn jumped as much as 5.8%, soy gained as much as 2.4%, and wheat futures soared to a 23-month high on the CBOT. The US is the biggest exporter of the crops.

Corn futures for December delivery rose 3 cents, or 0.7%, to close at US$4.18 a bushel at CBOT. Earlier, the price reached US$4.39, the highest level for a most-active contract since June 15, 2009.

Soy futures for November delivery gained 4.75 cents, or 0.5%, to close at US$10.29 a bushel on the CBOT. Earlier, the oilseed reached $10.49, the highest level since January 7.

Corn rose to a record US$7.9925 on June 27, 2008, and soy climbed to an all-time high of US$16.3675 on July 3, 2008.

Analysts said that last year, the world fed about 18% of the wheat crop to animals, and that will have to be cut back, increasing demand for corn and soy.

Russia was expected to be the world's fifth-largest wheat exporter in the marketing year that ends May 31, after the US, the EU, Australia and Canada, according to the USDA.

Corn is the biggest US crop, valued at US$48.6 billion in 2009, followed by soy at US$31.8 billion, government figures show.