March 24, 2011
 

CBOT corn ends higher due to China rumours

CBOT corn futures ended higher in unstable trading on Monday (Mar 21), with expectations still high for affirmation of rumoured US corn sales to China, which helped the market bounced back by 11% over two days last week.

Some traders guessed the US government's announcement of 116,000 tonnes of old crop US corn on Monday (Mar 21) sold to an unnamed buyer was actually for China, the second largest consumer of the grain in the world. Last Thursday (Mar 17), the USDA announced a similar sale, also to an unnamed buyer.

"There is a possibility it could be for China but nothing is confirmed. China is always testing the water so there is a possibility it could be for them," said an analyst. The rumours, which caused corn futures to rise past their daily US$0.40 trading limit on Thursday (Mar 17) and by the raised US$0.45 cap on Friday (Mar 18), continued to be the talk of the grain trading floor on Monday (Mar 21). "Half the commercials said China did it while half said it did not," said another analyst.
 

Earlier, trades corn fell, undoing the overnight trend, as rumours of China buying a large amount of corn from the US went unconfirmed. "The market would surely do better if we got confirmation of the China purchase," said an analyst. "In the absence of the confirmation, there is a lack of upside follow-through and technicals turned negative as trendlines became resistant."

Rises in corn also were capped by a report from Goldman Sachs forecasting US corn acreage this year at 92.1 million (37.3 million hectares), over the USDA's current estimate of 92 million. USDA will disseminate its first sowings data for 2011 based on a farmer survey on March 31.