April 29, 2009

     
Grains prices seem to have absorbed the impact of the swine flu scare, and are slowly returning to the fundamentals of supply and demand.

In Tuesday's pit-trade, Chicago Board of Trade corn futures made some gains, as the market focused on rains delaying the sowing of the U.S. crop, which could lead some farmers to shift from corn to soys.

At 0626 GMT, the CBOT May corn contract was trading 2 cents higher at US$3.77/bushel.

"I think the flu has been discounted largely and unless there's a rapid spread, prices will respond to other fundamental issues, such as crop planting in the U.S. and other countries," said Genichiro Higaki, an analyst with Tokyo-based commodities broking firm Sumitomo.

Genichiro said that US$4/bushel seemed like a good technical support level for new crop corn, which corresponds to the December contract, currently trading at US$4.06/bushel, while for the old crop, represented by the May contract, support is pegged at US$3.70/bushel.

CBOT soy futures are also higher in electronic trade, after closing lower in overnight pit-trade.

At 0635 GMT, the CBOT May soy contract was trading 10.5 cents higher at US$10/bushel.

CBOT soy futures fell overnight on rumors circulating in the market that Chinese traders may have canceled up to five shipments of old crop soys from the U.S.

"Considering China's dominance on the demand side, if we see no further old crop soy buying from them, then old crop prices could enter a tailspin," said the U.S.-based AgWeb website.

China is the world's biggest soy importer, importing up to 4 million tonnes of soys a month.