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Corn rallies on exports, S.A. rainfall

10/31/2012 @ 3:28pm

U.S. corn futures rallied Wednesday to one-week highs, fueled by positive technical signals and concerns about delayed crop plantings in South America due to heavy rainfall.

Corn prices bounced back from recent losses, climbing to the top end of a three-week trading range.

Corn futures for December delivery rose 14 cents, or 1.9%, to settle at $7.55 3/4 a bushel at the Chicago Board of Trade.

Traders pushed corn higher after technical signals showed the market held above closely watched support levels in recent days, said Mike Zuzolo, president of Global Commodity Analytics and Consulting in Lafayette, Ind. End-of-month speculative buying from managed funds helped lift prices, Mr. Zuzolo said.

Prices also got a boost from concerns about a slow start to the planting season in parts of Brazil and Argentina, where heavy rain is keeping farmers out of their fields. Brazil and Argentina are large producers after the U.S.

Some traders think the U.S. corn market could see a rebound in export demand in the coming weeks. U.S exports have been lackluster for weeks, but global supplies of the grain are tightening. Brazil is running low on corn available for export, said Bill Gary, president of agricultural-advisory firm Commodity Information Systems Inc. in Oklahoma City.

"The market is beginning to deal with the realization that the rest of the world is starting to run short on corn and wheat," Mr. Gary said.

U.S. corn export sales have fallen sharply over the past few months, as foreign importers including China and Japan balked at record prices sparked by a severe drought in the Farm Belt.

Wheat futures, which often trade in tandem with corn, also rose Wednesday, amid hopes that export demand for U.S. wheat will rise in the coming weeks. Export competition from Europe's Black Sea region is drying up as supplies run low in Ukraine and Russia, which have faced their own droughts.

December wheat futures ended up 7 3/4 cents, or 0.9%, to $8.64 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade December wheat rose 1 3/4 cents, or 0.2%, to $9.04 a bushel. MGEX December wheat finished up 7 1/4 cents, or 0.8%, at $9.42 a bushel.

Analysts think export demand for U.S. wheat is poised to climb, as world prices have risen to levels that make U.S. values more competitive. Traders were surprised that U.S. soft red winter wheat prices were priced below European wheat in an Egyptian tender on Wednesday, Mr. Gary said. The U.S. did not secure any of the business, but that was due to lower freight charges from the European Union, compared with shipping from the U.S.

U.S. soybean futures also settled higher, boosted by strong demand, firm cash prices and uncertainty about crops in South America.

Chicago Board of Trade soybeans for November delivery settled up 13 1/4 cents, or 0.9%, at $15.47 a bushel. Soybeans for January delivery finished up 12 1/4 cents, or 0.8%, to $15.48 3/4.

-Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
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(END) Dow Jones Newswires
October 31, 2012 16:13 ET (20:13 GMT)
DJ US GRAIN AND SOY REVIEW: Corn Rallies on Technical Moves, South American Rains->copyright

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