Corn futures advanced for the first time in five sessions and wheat and soybeans gained as recent declines may have made U.S. supplies more attractive to importers and investors, amid signs of stronger global demand.
Corn dropped 3.8 percent in the four sessions before today. A weaker dollar, down 1.8 percent this month against a basket of six major currencies, also may boost the appeal of U.S. grains. Russia’s corn crop could fall 24 percent this year on dry weather, according to Moscow-based researcher SovEcon.
“The macro environment is supportive for corn with the U.S. dollar being weak,” said Kona Haque, an analyst at Macquarie Group Ltd. in London. “Fundamentally, we remain very bullish on corn. Clearly there are going to be spillover effects into soybeans and wheat.”
Corn futures for December delivery rose 1.5 cents, or 0.3 percent, to $5.5875 a bushel on the Chicago Board of Trade at 11:18 a.m. London time. The most-active contract has gained 13 percent this month, partly because the U.S. Department of Agriculture said on Oct. 8 that domestic production would fall 3.4 percent from a year earlier, more than expected by analysts.
“Since the USDA report, the market cannot be complacent,” Haque said. “We’re looking at a global deficit and a U.S. deficit. We need more production to avoid a sharper deficit.”
Russia may import more than 2 million metric tons 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.
Corn imports by Russia from the U.S. may be “several hundred thousand tons,” with deliveries unlikely before the start of 2011, Sizov said. SovEcon forecast higher imports for Russia after it estimated on Oct. 15 that the nation’s corn crop will fall 24 percent from the previous year to less than 3 million tons.
“It’s probably seen by some as a buy opportunity,” said Michael Pitts, commodity sales director at National Australia Bank Ltd., referring to the price declines. Russia’s corn imports are “obviously supportive” for prices, he said.
Ukraine, the world’s fourth-largest corn exporter last year, set a 2 million-ton limit on shipments of the grain from yesterday through to the end of the year, according to a resolution posted on the government’s website.
Ukraine also set limits of 500,000 tons on wheat exports and 200,000 tons for barley. The government, which forecast Ukraine’s grain harvest will decline by 16 percent this year to 38.6 million tons, 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 percent last month.
Soybeans for January delivery gained 7 cents, or 0.6 percent, to $12.02 a bushel in Chicago. Soybeans for export inspected at U.S. ports rose 22 percent from a week earlier to 59.4 million bushels in the week to Oct. 14, the USDA said yesterday.
Egypt, the world’s biggest wheat importer, plans to buy at least 55,000 tons from the U.S., Canada, Australia, Argentina, U.K., Germany or France in a tender today for shipment in December, Nomani Nomani, the vice chairman of the state-run General Authority for Supply Commodities, said yesterday. Japan said today it plans to buy 122,861 tons of the grain.
Wheat for December delivery gained 1 cent, or 0.1 percent, to $6.91 a bushel in Chicago. The price is up 2.5 percent this month. Milling wheat for November delivery traded on NYSE Liffe in Paris fell 0.7 percent to 212.25 euros ($295.39) a ton.