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China rumors rally corn

Updated: 05/12/2011 @ 2:07pm

CHICAGO, Illinois (Agriculture.com)--Rumors of China buying U.S. corn rallied the CME Group corn and soybean markets Thursday. 

The July corn futures settled 3 1/4 cents higher at $6.80 1/2. The July soybean contract ended 11 cents higher at $13.42 3/4. The July wheat futures closed 23 1/2 cents lower at $7.35 1/2. The July soybean meal futures settled $5.70 per short ton higher at $353.30. The July soyoil futures closed $0.16 higher at $56.46.

In the outside markets, the NYMEX crude oil is $0.87 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 61 points.

Whether the rumors of China buying 1-2.0 million metric tons of U.S. corn are right or not, the traders ran the market up and then sold it on the close. At one point, the corn market was up 13 cents. We'll find out tomorrow if the China talk is true or if the market discounts the rumors, traders say.

"Rumors that China is buying U.S. corn and that Japanese buyers are in the market buying expiring May corn futures," Joe Bedore, FC Stones Inc.'s CME Group floor manager says. "So, two fronts from Asian markets are hitting the corn market. This higher price movement will carry into tomorrow, only if we can confirm that China actually bought U.S. corn."

Yet another floor trader, requesting anonymity, says the margins work if China brings the corn in duty-free. "But the margins don't work given current prices, if you rally another 30 cents." 

Jack Scoville, PRICE Futures Group vice-president, says the rumors of China's interest in U.S. corn started earlier this week. "I have now heard it twice this week. So, there must be something to it," Scoville says. 

Also, the outside markets, reversing their direction from yesterday, were more supportive for the grains Thursday, Scoville says.

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