Corn, Soy Head for Monthly Gain Amid Global Economy Recovery

Corn and soybeans advanced for a third day and are heading for monthly gains on speculation the global economic recovery will bolster demand for food, animal feed and biofuels.

Corn has advanced 7.3 percent this month, touching a seven- week high yesterday, and soybeans have gained 6.1 percent. U.S. and European stocks advanced yesterday as company profits rose and unemployment claims in Germany and the U.S. declined, adding to signs the global economy is strengthening.

“With the improving corporate earnings, optimism of an economic recovery boosted most commodities,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co. The outlook for China’s purchases also lent “strong support” to corn and soybeans, he said.

Corn for July delivery climbed 0.3 percent to $3.70 a bushel on the Chicago Board of Trade at 1:10 p.m. Tokyo time. The contract reached $3.7775 yesterday, the highest level for a most-active contract since March 8.

Soybeans for July delivery rose as much as 0.4 percent to $10 a bushel and last traded at $9.9975. July wheat advanced 0.5 percent to $4.9775 a bushel in Chicago and has gained 7.1 percent this month.

In the export market, South Korea’s Nonghyup Feed Inc. is seeking to buy as much as 110,000 metric tons of corn in a tender today. U.S. exporters sold 120,000 tons of soybeans to China and 101,600 tons of corn to Japan, the U.S. Department of Agriculture said yesterday.

Corn Demand

Corn gained 1.4 percent yesterday on speculation China, the world’s second-largest consumer of the grain and the second- largest grower after the U.S., may bolster imports. It was last a net importer of corn in 1996, when it imported 1.476 million tons after drought reduced crops the year before.

China’s harvest plunged 13 percent last year and was the smallest since 2005 because of drought in the main growing regions, farmers said in surveys in September and October.

The country’s corn market is showing signs of “short-term tightness” after weather slowed transport and drought raised speculation about shortages, the National Grain & Oils Information Center said April 14.

China’s corn production will probably fall to 155 million tons in the 2009-2010 season from 165.9 million the year before, the USDA said April 9. It may import 100,000 tons this season, the department said.

Jae Hur
Source: Bloomberg