September 9, 2010

CBOT corn trades near 14-month high on speculation about lower supplies

Corn traded within 0.7% of a 14-month high on September 8 amid speculation that declining supplies of grain for use as feed may support prices.

Corn for December delivery slipped 0.2% to US$4.655 a bushel on the Chicago Board of Trade at 2:14 p.m. Paris time. Prices climbed last week for the fifth time in six weeks.

"Fundamentals for corn are very healthy, as there's concern about the supply side because of tightening feed-grain supplies," Sudakshina Unnikrishnan, an analyst at Barclays Capital in London said. "Demand has continued to rise significantly."

Ukraine reduced its corn-harvest forecast by 6.8% to 11 million tonnes because of drought. Still, the crop will suffice to meet domestic needs and permit the export of 4-5 million tonnes of the grain in the marketing year that started July 1, Agriculture Minister Mykola Prysyazhnyuk said.

"In recent weeks, metals and oil took a bit of a battering because of concerns about the global economy," Unnikrishnan said. "However, agricultural products including corn have been trading more on the back of their own specific fundamentals."