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Corn jumps to 6-month highs; exports fuel higher soybeans

03/06/2014 @ 3:30pm

Corn jumped to a six-month high and soybeans gained after sales of both commodities to overseas buyers surged. Wheat also rose.

Corn exporters sold 1.52 million metric tons in the week ended Feb. 27 for delivery in the marketing year that ends on Aug. 31, up 81% from the prior week and 35% from the previous four-week average, the USDA said in a Thursday report. Mexico was the biggest buyer, purchasing 437,400 tons, and Japan bought 342,400 tons.

Exporters sold 772,700 metric tons of soybeans, more than double the prior week, according to the report.

Investors had worried that rising prices in the past month would curb demand for U.S. grain and soybeans, which apparently isn't the case, said Larry Glenn, an analyst at Frontier Ag in Quinter, Kan.

"We had sizeable sales, and when the prices were rallying, so maybe the price wasn't a problem," Mr. Glenn said.

Chicago Board of Trade corn futures for March delivery rose 10 1/2 cents, or 2.2%, to $4.85 3/4 a bushel, the highest closing price for a front-month contract since Sept. 6. May futures, the most-active contract, rose nine cents, or 1.9%, to $4.91 a bushel on the CBOT.

Soybean futures for March delivery gained 17 1/2 cents, or 1.2%, to $14.37 1/2 a bushel in Chicago trading. Futures for May delivery also rose 17 1/2 cents, or 1.2%, to $14.38 a bushel.

Wheat gained, erasing earlier losses, on reports that growers in Ukraine have stopped selling grain as the value of their local currency declines amid tensions with Russia.

Wheat futures for March delivery gained 4 1/4 cents, or 0.7%, to $6.41 1/2 a bushel in Chicago trading. May contracts rose 3 1/2 cents, or 0.5%, to $6.46 a bushel.

Grain exports from Ukraine have thus far been unaffected by the country's turmoil with Russia, according to an official at the Infrastructure Ministry. Rail shipments to ports have been on-time, but deliveries by truck have been slowed in the Crimean Peninsula, the official said.

Grain stockpiles in Ukraine as of Monday topped 28 million tons, including 9.6 million tons of wheat, 3.8 million tons of barley and 13.5 million tons of corn, according to the agriculture ministry. Ukraine is forecast to consume 11.9 million tons of grain from March through June, with another 7.6 million tons being kept in reserve, leaving 8.7 million tons for export, according to the ministry.

Farmers, however, aren't selling grain as the declining value of the local currency, the hryvnia, versus the dollar means they will earn less for their corn and wheat, traders in the country said. That may lead to a shortage of available grain for export in coming months.

"The majority of owners of large volumes of grain only agree to sell for dollars--contracts in hryvnias are practically nonexistent at the moment," a Kiev-based grain trader said. "The pace of export has been high so far but it is likely to fall when existing stocks at sea ports are exhausted."

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