Corn gains on speculation of increased Chinese demand

Corn gains on speculation of increased Chinese demand
Corn gains on speculation of increased Chinese demand
Corn gains on speculation of increased Chinese demand
Corn gains on speculation of increased Chinese demand
Corn gains on speculation of increased Chinese demand
Corn gains on speculation of increased Chinese demand

Forexpros – Corn futures rose on Thursday, recouping the previous day’s losses amid speculation that Chinese corn demand will remain strong in the near-term, while a broadly weaker U.S. dollar also lent support.

On the Chicago Mercantile Exchange, corn futures for December delivery traded at USD6.5438 a bushel during European morning trade, jumping 1.55%. 

It earlier rose by as much as 1.75% to trade at a daily high of USD6.5538 a bushel.

Corn prices were boosted after a survey of corn growers in the seven main producing regions in China showed that corn imports were expected to rise to a record high 5 million tons in the 2011-12 marketing season.

Chinese corn imports totaled 1 million tons in the previous marketing season.

According to the data, corn production was expected to reach a record 189.2 million metric tons in the harvest that began in September, 6.7% more than a year earlier.

However, the expected jump in imports underline the view that Chinese farmers are failing to grow enough grain to meet rising demand.

U.S.-based commodity broker Newedge Group said in a report earlier that, “It’s an amazing crop, but demand is just too strong. “Everybody has been projecting a record crop, and yet the Chinese government just bought U.S. corn.”

China purchased approximately 900,000 tonnes of U.S. corn on October 13, the second largest single-day sale of U.S. corn supplies on record, according to the U.S. Department of Agriculture. China is the world’s second largest corn consumer.

Meanwhile, weakness in the U.S. dollar also contributed to gains as commodity traders continued to eye development out of Greece.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.3% to trade at 77.06.

A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.

Elsewhere on the Chicago Mercantile Exchange, wheat for December delivery rose 1.2% to trade at USD6.3063 a bushel, while soybeans for January delivery jumped 1.77% to trade at USD12.2475 a bushel.