Chicago corn, soybean hike as adverse weather expected to hurt crops in South America

08:26, January 11, 2011      

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Chicago corn and soybeans rebounded on Monday, as the adverse weather in the South America is expected to hurt the crops there. Meanwhile, wheat dropped to a two-week low on bet of an increase in U.S. winter-crop acreage.

The most active corn contract for March delivery rose 12 cents, or two percent, to 6.07 U.S. dollars per bushel. March wheat shed 6.75 cents, or 0.585 percent, to 7.6725 dollars per bushel. March soybean hiked 15.5 cents, or 1.1 percent, to 13.805 dollars per bushel.

Market traders said that the expectation over crop reduction in Argentina and Brazil has driven up the prices of corn and soybean.

According to weather forecast, dry weather and temperatures rising above 100 degrees Fahrenheit (38 degrees Celsius) in parts of Argentina in the next week will increase stress on corn and soybean plants.

Besides, the corn and soybean prices were also supported by a hike in the crude oil price, which rose as much as 2.2 percent and thus increased prospects for corn-based ethanol and biofuel made from soybean.

In contrast, the wheat market carried weak sentiments into this week due to anticipation of expansion in winter-crop acreage. A grain analyst expected that the U.S. farmers probably planted 40. 787 million acres of winter wheat, 9.2 percent more than a year earlier. The U.S. Department of Agriculture (USDA) will unveil the data in Tuesday's report.

Wheat was up 35 percent in 2010 as adverse weather in countries including Russia and Australia threatened world output and spurred demand for U.S. supplies.

Source: Xinhua
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