Corn Gains on Speculation China to Buy U.S. Grain; Wheat Rises

By Jeff Wilson - Apr 24, 2012
Bloomberg
Corn rose on speculation that China, the world’s largest pork consumer, will buy more U.S. grain to meet expanding demand for feed from hog producers. Wheat also advanced.

U.S. exporters sold 120,000 metric tons of corn to unknown destinations for delivery after Sept. 1, the U.S. Department of Agriculture said today. China’s state traders may buy U.S. supplies if corn falls to $5.50 a bushel, the China National Grain & Oils Information Center said today. Before today, prices for delivery in December, after the U.S. harvest, were down 8.4 percent this year to $5.3675 a bushel in Chicago.

“The trade is looking for more sales to be announced to China,” Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “Imported U.S. corn is competitive with supplies in China.”

Corn futures for July delivery rose 1.6 percent to close at $6.125 a bushel at 1:15 p.m. on the Chicago Board of Trade, after falling 8.4 percent the previous two weeks, the biggest such decline this year. On April 18, the price touched $5.9175, the lowest for the most active contract since Dec. 19.

Corn imports by China reached 472,026 tons in March, up from 2,340 tons a year earlier, according to an e-mailed statement from the customs agency today.

Temperatures will drop below freezing on April 30, following the cold weather earlier this month, threatening to damage crops in parts of the southern Mississippi River Valley and the eastern Midwest, Henderson said.

Wheat futures for July delivery rose 1.5 percent to $6.325 a bushel on the CBOT, the second gain in three sessions. On April 18, the most-active contract touched $6.0925, the lowest since Jan. 20.

Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, government figures show. Wheat was the fourth-largest after soybeans and hay.