Corn Advances to 30-Month High, Wheat Gains on Falling Stocks
Corn rose for a fifth day to a 30- month high in Chicago and wheat climbed amid shrinking global stockpiles. Soybeans advanced on speculation that a strengthening yuan may spur imports into China.
World corn supplies will fall 14 percent this year and wheat inventories will drop 9.8 percent, the U.S. Department of Agriculture said last week. Prices also gained as the dollar weakened, making U.S. crops cheaper in terms of other monies. The yuan advanced to a 17-year high against the U.S. currency yesterday.
“The fundamentals are all in place for a very strong rally all of this year,” said Gary Mead, an analyst with VM Group in London. “The USDA figures sent a bolt of lightning through the market because the stocks-to-use ratio is going to be tight indeed through the end of August. And we have a lot of weather uncertainties to get through.”
Corn for March delivery gained 0.9 percent to $6.655 a bushel at 11:27 a.m. London time on the Chicago Board of Trade. The grain touched $6.6625, the highest price since July 17, 2008. March-delivery soybeans added 1.2 percent to $14.3025 a bushel.
Chinese President Hu Jintao met yesterday with U.S. President Barack Obama, boosting hopes that trade relations recently under strain will improve, Chung Yang Ker, an analyst at Phillip Futures Pte, said by phone from Singapore.
Chinese Imports
“The Hu Jintao visit sparked speculation of a revival of China’s corn imports from the U.S.,” Ker said. “The U.S. may also play a bigger role” in meeting China’s soybean import needs, he said.
China, the world’s biggest grains user, in December began an anti-dumping investigation into U.S. shipments of dried distillers’ grains, a byproduct of corn-based ethanol that’s used in animal feed. Before the investigation, the U.S. filed a complaint at the World Trade Organization against China over support for its wind-energy manufacturers.
March-delivery wheat gained 1.7 percent to $8.065 a bushel, climbing for a second day. Milling wheat for March delivery traded on NYSE Liffe in Paris climbed 1.8 percent to 260.25 euros ($350.32) a metric ton.
U.S. exporters sold 145,000 tons of hard red winter wheat to Turkey for delivery in the 2010-2011 marketing year that began June 1, the USDA said yesterday.
Export Inspections
As of Jan. 13, U.S. authorities had inspected 700.7 million bushels of the grain for export since the marketing year began June 1, up 36 percent from a year ago, the USDA said yesterday.
Conditions in Kansas, the largest winter-wheat state, ranged from abnormally dry to severe drought, data from the University of Nebraska at Lincoln showed. In China, about 4 million hectares (9.9 million acres) of crops have had up to 90 percent less rain than last year, the Xinhua News Agency said. Floods in Australia have delayed shipments and reduced crop quality.
“There’s pressure on land all over,” VM’s Mead said. “What are farmers going to grow? That’s the question. Look at potash companies -- the stock prices are up very high. Wherever you turn, there’s a remarkable bull rally going on. There’s a quite a bit of speculative investment following this bullish context.”
BHP Billiton Ltd. made an unsuccessful $40 billion bid in August for Potash Corp. of Saskatchewan Inc., the world’s largest producer of the namesake crop nutrient. Russian producer OAO Uralkali said in December it would acquire domestic competitor OAO Silvinit for $7.8 billion.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, slid as much as 0.7 percent as it retreated for a seventh day in eight.
To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Tony C. Dreibus in London at tdreibus@bloomberg.net.
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net.
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