Chicago grain prices rally on demand expansion

The grain market in Chicago on Monday kicked off the week with a strong rally amid increased demand around the world, with corn rising the most in three weeks, and wheat and soybean rebounding from the prior slumps.

The most active corn contract for December delivery hiked 21.5 cents, or four percent, to 5.555 U.S. dollars per bushel. December wheat rose 3.5 cents, or 0.5 percent, to 7.125 dollars per bushel. January soybean gained 17.5 cents, or 1.4 percent, to 12.865 dollars per bushel.

The U.S. Department of Agriculture (USDA) on Monday announced the country's export sales, showing a strong demand for grain around the world, which is the major force behind the rebound, according to market traders.

The USDA announced two export sales in corn. One sale was for 281,000 metric tons of corn to the Republic of Korea, and the other was for 120,000 metric tons to Egypt. Both were for delivery during the 2010/11 crop marketing year.

Moreover, market talk went that China may buy several million tonnes of corn from Argentina, which is fairly supportive for the market, said a trader. However, some analysts had suggested earlier that it could take up to two years to lay the groundwork for large sales.

Besides, U.S. exporters sold 100,000 metric tons of wheat to Iraq for delivery in the year that began June 1, according to the USDA. A trader said that overseas buyers, food manufacturers and livestock producers may boost purchases after March futures plunged 7.7 percent in the prior week.

The USDA said that 105,000 tonnes of soybean was sold to an unknown destination and soybean from U.S. processors also rose 22 percent in October from September as farmers increased sales of newly-harvested crops.

The National Oilseed Processors' Association reported October's crush reached 151.8 million bushels, in comparison with 124.917 million in the previous month.

Source: Xinhua