Chicago corn, wheat futures jump on speculation of rising Chinese demand, soybean dips

11:34, May 22, 2010      

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Corn futures in Chicago Board of Trade jumped the most in three weeks on Friday, wheat climbed the most in two weeks on speculations that grain demand from China would increase. Soybean retreated on favorable weather outlook.

Soybean futures for July delivery was down 3.0 cent to settle at 9.41 U.S. dollars per bushel. July corn climbed 7.0 cents to 3. 69 dollars a bushel. July wheat rose 2.25 cents to 4.72 dollars a bushel.

The USDA announced on Friday morning a sale of 118,000 tons of corn to China for delivery during the 2009/10 marketing year, along with 120,000 tons of soybeans for delivery during the 2010/ 11 marketing year. Traders welcomed the news and expected China would further step up purchase of feed grain from the United States. The increasing demand from China has provided major support for corn and soybean on Friday.

Corn and wheat firmed to higher during earlier session, lifted by the recovery of stock market, which had a tumultuous ride this week and rebounded on Friday. But the warmer and drier weather to end the week in the Midwest Corn Belt would guarantee the remainder of the crop being planted next week, and trimmed some gains of corn, but the fund-buying and short-covering have pushed the corn price higher, as many traders had dumped corn, when stocks and oil markets kept plunging through the week.

The warm and relatively dry air in the United States was considered conducive to the late crop development of wheat, and kept a lid on wheat price, but wheat still managed to close higher, as traders noted that the increasing demand of corn and soybean from China also fueled the speculation that more wheat would be imported to China.

The crude oil price continued to fall on Friday, and added downward pressure on soybean, trader also suggested that the substantially warmer and drier weather next week which would boost the yield prospects dragged down the soybean price.

Source: Xinhua


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