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Corn rises on export optimism

11/19/2012 @ 3:15pm

U.S. corn futures rose Monday, boosted by favorable outside markets and hopes for greater export demand for U.S. corn.

Chicago Board of Trade December corn futures settled up 11 3/4 cents or 1.6% at $7.38 3/4 a bushel.

Outside markets boosted grain and soybean futures. The dollar was weaker, while crude oil and stocks rose on hopes lawmakers in Washington will be able to resolve the impending "fiscal cliff."

Corn futures also benefited from signs export demand for the U.S. crop could rise after weeks of poor export-sales reports, analysts said.




A U.S. Department of Agriculture report Monday showed more corn than expected was inspected or weighed for export in the week through Nov. 15. Corn inspections were 14.35 million bushels, above analysts' expectations that ranged from eight million to 13 million bushels.

Signs are also emerging of corn buyers in Asia switching to the U.S. for purchases of the grain at a time of port congestion and shipment delays in Brazil. Brazil, the world's third-largest corn exporter after the U.S. and Argentina, had experienced a sharp increase in exports in recent weeks.

"Everybody is kind of betting that [U.S. exports] will get better, and they probably will," said Jim Gerlach, president of A/C Trading Co., a Fowler, Ind., commodities brokerage.

Strong U.S. cash markets for corn also provided support to futures Monday, Mr. Gerlach said. Cash markets have been strong since the U.S. harvest wrapped up and farmer sales of physical supplies slowed down.

The nation's corn crop is expected to be the smallest in six years, according to USDA forecasts, making supplies relatively tight.

U.S. corn futures also received a boost Monday from concerns about Argentina's corn crop. Excessive rains likely will keep growers in Argentina from planting as much acreage as they initially planned, so production next year is likely to "come down a bit," said Doug Bergman, a vice president with RCM Asset Management in Chicago. "They've been pretty wet for the last month and a half."

Soybean futures rose in reaction to sharp declines last week. Some traders Monday were likely buying futures to exit bets on lower prices, sending futures higher, traders said. Friday, January soybean futures had fallen to a fresh five-month low, partly on a positive outlook for South American crops.

January soybean futures rose 11 1/2 cents or 0.8% to $13.94 3/4 a bushel.

Wheat futures rose on concerns about dry soil for wheat crops in the U.S. southern Plains, and other signs of tighter world supplies. Wheat also benefited from buying interest after price declines last week. CBOT December wheat Friday settled at a four-month low for the front-month contract.

CBOT December Monday wheat rose 3 3/4 cents or 0.4% to $8.41 3/4 a bushel. KCBT December wheat settled flat at $8.76 a bushel. MGEX December wheat rose 1/2 cent or 0.1% to $9.10 1/4 a bushel.


Write to Owen Fletcher at owen.fletcher@dowjones.com
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(END) Dow Jones Newswires
November 19, 2012 15:34 ET (20:34 GMT)
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