January 16, 2015 / 5:03 PM / 4 years ago

GRAINS-Corn rallies 1.8 pct on bargain buying, export demand

(Adds U.S. market activity to close)
    By Michael Hirtzer
    CHICAGO, Jan 16 (Reuters) - U.S. corn rose 1.8 percent on
Friday for its biggest daily gain  in about two weeks,
rebounding from a nearly two-month low on support from short
covering and increasing export demand.
    Wheat and soybean futures were mixed in light volume, with
bargain buying supporting some contracts even as worries of
reduced export demand capped gains. Top importer China canceled
a large purchase of U.S. soybeans.
    The higher prices for agriculture commodities were part of a
broad rally with crude oil and stocks higher ahead of the
Martin Luther King Jr. U.S. holiday on Monday.
    "It's a corrective rally. Crude is higher. The corn basis is
firm and probably some export business being done near the
100-day moving average," said independent trader Ken Smithmier.
    The U.S. Department of Agriculture earlier said exporters
sold 101,600 tonnes of U.S. corn to unknown destinations, in the
fourth announcement of a sale of 100,000 tonnes or more in a
week. 
    The USDA also said China canceled purchases of 285,000
tonnes of U.S. soybeans.
    Chicago Board of Trade March corn futures were up 7
cents at $3.87 per bushel, gaining the most since Jan. 5 but
still shedding about 3.5 percent for the week. The contract
tested its 100-day moving average on Wednesday when prices fell
to the lowest since November, prompting a round of buying by
importers such as Japan, South Korea and Taiwan. 
    CBOT March wheat was flat at $5.32-3/4, losing 5
percent for the week - the largest weekly drop since September.
Prices for the grain remained anchored by poor export demand,
with U.S. wheat too expensive to compete for business in many
top global markets including Egypt.    
    "The downward trend on U.S. wheat has become more and more
pronounced. The correction has already taken it halfway towards
the $5 floor due to fact that U.S. wheat is not competitive,"
Alexis Poullain of French consultancy Agritel said.
    Soybeans for March delivery edged 3/4 cent higher to
$9.91-3/4 per bushel, hovering near their lowest since Oct. 27.
The July and August contracts lost ground, pressured by
expectations of record production in South America and the China
export cancellation.
    
 Name                  Last        Pct       Net       Pvs
                                Change    Change     Close
 CORN MAR5              387       1.84         7       380
 SOYBEANS MAR5       991.75       0.08      0.75       991
 SOY MEAL MAR5        326.2      -0.15      -0.5     326.7
 SOYBEAN OIL MAR5     33.39       1.21       0.4     32.99
 WHEAT SRW MAR5      532.75          0         0    532.75
 ROUGH RICE MAR5     11.325      -0.04    -0.005     11.33
 M.WHEAT EUR MAY5       198       1.67      3.25    194.75
 LIGHT CRUDE FEB5     48.35       4.54       2.1     46.25
 DJ INDU AVERAGE   17425.58       0.61    104.87  17320.71
 BALTIC EXCH DRY        741      -1.07        -8       749
 US DOLLAR INDEX     92.497       0.16     0.145    92.352
 

 (Additional reporting by Gus Trompiz in Paris and Naveen
Thukral in Singapore; Editing by William Hardy, Matthew Lewis
and Steve Orlofsky)
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