October 19, 2010

US corn, wheat, soy advance on signs of demand growth

Corn futures advanced for the first time in five sessions, while wheat and soy also gained, on speculation recent declines made US supplies more attractive to importers and investors, amid signs of stronger global demand.

Corn for December delivery added 0.6% to US$5.605 a bushel on the CBOT at 2:43 p.m. Singapore time. The grain lost 3.8% from October 12 through yesterday.

Russia may import more than two million tonnes of corn in the marketing year that started July 1, mostly from Ukraine, Andrei Sizov Jr., SovEcon managing director, said yesterday. That's double the level of imports forecast for the country by the USDA.

"It's probably seen by some as a buy opportunity. Russia's corn imports are obviously supportive for prices," said Michael Pitts, commodity sales director at National Australia Bank Ltd., referring to the price declines.

Corn imports by Russia from the US may be "several hundred thousand tonnes," with deliveries unlikely before the start of 2011, Sizov said. SovEcon, a Moscow-based researcher, forecast higher imports for Russia after it estimated on October 15 that the nation's corn crop will fall 24% from the previous year to less than three million tonnes.

Ukraine set a two million-tonne limit on shipments of the grain from yesterday through to the end of the year, according to the government.

December-delivery wheat rose as much 0.9% to US$6.965 a bushel, before trading at US$6.95.

Ukraine also set limits of 500,000 tonnes on wheat exports and 200,000 tonnes for barley. The government, which forecast Ukraine's grain harvest will decline by 16% this year to 38.6 million tonnes, had debated whether to introduce export quotas since August as it sought to control domestic food prices after a drought damaged crops and inflation accelerated to 10.5% last month.

January-delivery soy gained 0.9% US$12.055 a bushel. Soy for export inspected at US ports rose 22% from a week earlier to 59.4 million bushels in the week to October 14, the USDA said yesterday.