U.S. corn futures ended higher Monday, boosted by speculation Chinese demand for U.S. corn will pick up.

Corn for May delivery, the most actively traded month, ended up 14 1/2 cents, or 2.2%, to $6.59 1/2 a bushel at the Chicago Board of Trade. March corn rose 17 1/2 cents, or 2.7%, to $6.71 1/2 a bushel, the highest price for the front-month contract since Sept. 21.

Futures continued to climb Monday on speculation Chinese companies recently locked down a large purchase of corn and the country will need to make additional buys. Analysts have been pointing to how key Chinese agencies differ on the size of the country's 2011 corn harvest.

While the Ministry of Agriculture said China harvested a record 192 million metric tons last year, the China National Grain and Oils Information Center, a key state grain industry think tank, estimated the harvest at 185 million tons, Standard Chartered said in a research note Monday.

Still, the two-day rally in prices could soon deflate if traders see no official reporting of sales to China by the U.S. Department of Agriculture. The agency publicly reports large export sales after they are inked and releases a weekly export sales report Thursday.

"If we don't get a Chinese announcement tomorrow--and I don't think we will--we should get a 'turnaround Tuesday' selloff," said Charlie Sernatinger, analyst at brokerage ABN Amro.

Gains in corn futures also are limited by expectations for a large U.S. planting this spring. Traders will next be watching a USDA report at the end of the month for data on what farmers plan to sow.

Still, corn supplies in the cash market remain tight, providing some support for futures as buyers of the commodity bid up prices to try and get farmers to sell.

"Cash is extremely tight," said Roy Huckabay, analyst for the Linn Group, a brokerage in Chicago.

Meanwhile, U.S. wheat futures ended higher, pulled upward along with corn. Wheat and corn are tied as the crops both can be used as animal feed.

CBOT May futures rose 8 1/4 cents to $6.51 1/4 a bushel, while May futures at the Kansas City Board of Trade climbed 12 cents to $6.96. May wheat jumped 14 1/2 cents to $8.19 1/2 at the MGEX in Minneapolis.

U.S. soybean futures ended lower, pressured by traders continuing to take profits on recent gains amid worries about export demand. Analysts are concerned that high soy prices could stall export demand, despite projected tight global supplies.

Further pressure came from Brazil's soy harvest picking up its pace, adding to global supplies, analysts said.

CBOT May soybeans ended down 3 1/4 cents to $13.30 1/2 a bushel.

-By Owen Fletcher, Dow Jones Newswires; 312-750-4120; owen.fletcher@dowjones.com
--Andrew Johnson Jr. contributed to this article.
(END) Dow Jones Newswires
March 12, 2012 17:08 ET (21:08 GMT)
DJ US GRAIN AND SOY REVIEW: Corn Rises On Tight Basis, China Speculation->copyright