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Corn Prices Advance as Outlook May Be Cut

July 9, 2013
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July 9 (Bloomberg) -- Wheat climbed the most in almost three weeks in Chicago after China bought the grain, while corn rose for a second day on speculation the U.S. government may cut its production outlook for the world’s largest grower.

China’s wheat imports may climb to 5.5 million metric tons in 2013-14, the most in nine years, based on the median of estimates from six traders and researchers in the country. The U.S. reported wheat sales of 840,000 metric tons to China yesterday, the most for a single day in almost a decade, for total sales of 1.32 million tons since July 3.

"In one week it’s therefore 1.3 million tons of U.S. wheat that’s been bought by China, confirming its requirements linked to a quality deterioration of the 2013 harvest," Paris-based farm advisor Agritel wrote in a market comment.

Wheat for September delivery rose 2.1 percent to $6.77 a bushel on the Chicago Board of Trade by 8:24 a.m. Milling wheat for delivery in November traded on NYSE Liffe in Paris added 1.6 percent to 196.50 euros ($252.75) a metric ton.

U.S. farmers will probably reap 13.983 billion bushels of corn this year, less than the 14.005 billion predicted by the Department of Agriculture last month, based on the average estimate of 20 analysts and trading firms surveyed by Bloomberg. The USDA is due to update its outlook on supply on July 11.

"If the USDA reduces its supply estimate as hot weather stresses crops, we’re looking at higher prices," Tetsu Emori, a commodity fund manager at Astmax Asset Management Inc., said by phone from Tokyo today. "The December contract has already hit a bottom. Weather conditions are uncertain."

 

Port Strike

Corn for delivery in December, after the U.S. harvest, rose 2.1 percent to $5.11 a bushel in Chicago, after adding 1.9 percent yesterday. The grain slumped on July 5 to $4.895, the lowest level since October 2010.

Soybeans for delivery in November rose 1.8 percent to $12.7525 a bushel, extending yesterday’s 2 percent climb. Soybean meal for delivery in December advanced 2.8 percent to $378.50 a short ton after yesterday adding 2.9 percent, the biggest gain for the most-active contract since June 11.

A strike at Argentina’s Timbues/San Lorenzo port is slowing grain and oilseed exports, Guillermo Wade, a port official from Rosario, said by phone. Farmers in Argentina, the world’s largest soybean-meal shipper, also went on strike last month, halting sales of grains and livestock to protest government policies including a tax increase on cereal and oilseed exports.

"China is probably struggling to import soybeans and soybean meal from the U.S. after the Argentine strike," Emori said. The Asian nation is the largest consumer of soybeans and the meal used to feed livestock and poultry, while the U.S. is the world’s biggest grower and exporter of the oilseed.

 

--With assistance from William Bi in Beijing. Editors: Dan Weeks, Claudia Carpenter

 

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

 

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

 

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RELATED TOPICS: Corn, Wheat, Marketing, Crops, USDA

 
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