Markets

Corn futures soar on crop concerns in China, US

By Luzi Ann Javier (China Daily)
Updated: 2010-08-31 10:35

SINGAPORE - Corn futures advanced to a 14-month high on speculation that the United States, the world's largest grower and exporter, may miss a forecast record harvest and as growing regions in China face flooding.

December-delivery corn rallied as much as 2 percent to $4.445 a bushel, the highest price for the most-active contract in Chicago since June 15, 2009. It traded at $4.4425 a bushel in morning trade.

The Midwest, the largest producing region in the US, will be drier than normal in the 10 days from Aug 27, according to a forecast by Accuweather.com over the weekend. Corn growing regions in China, including Heilongjiang and Liaoning, will have as much as 1.25 inches of rain, renewing flooding problems, it said in a separate report.

"Weather concerns in parts of the US, Argentina and Asia supported prices, along with export demand for US corn," Commonwealth Bank of Australia said in a report e-mailed on Monday.

Twenty-one of 32 traders and analysts surveyed from Chicago to Tokyo on Aug 27 said corn will climb this week and 20 of 33 predicted soybeans will rally on speculation dry weather will reduce US crop yields.

US corn production will reach 13.365 billion bushels, 1.9 percent more than 2009's record crop, the US Department of Agriculture said in an Aug 12 report. A record soybean harvest of 3.433 billion bushels was forecast by the department, up 2.2 percent from last year.

Hedge-fund managers and other large speculators increased their net-long position in Chicago corn futures by 10,740 contracts in the week ended Aug 24, 3 percent higher than a week earlier, according to US Commodity Futures Trading Commission data. Net-long positions are the difference between bets on price gains and price declines.

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Speculative long positions, or bets prices will rise, outnumbered short positions by 357,975 contracts on the Chicago Board of Trade, the Washington-based commission said in its Commitments of Traders report.

Soybeans for November delivery added 0.7 percent to $10.3325 bushel, while wheat for December delivery jumped 2.5 percent to $7.1225 a bushel.

Net-long positions in wheat rose by 3,300 contracts, or 10 percent, to 36,743 contracts in the week ended Aug 24, according to the commission's report.

Speculative long positions in soybeans outnumbered short positions by 139,374 contracts, according to the commission. Net-long positions rose by 3,580 contracts, or 2.6 percent, from a week earlier.

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