Delivery Corn Prices Gains while Soybeans Advanced on Speculation

Delivery corn prices for March gained as much as 0.5 percent to $6.625 a bushel in Chicago before trading at $6.615 at 11:54 a.m. Singapore time. Yesterday, it rose as high as $6.6275, the highest price for the most-active contract since July 17, 2008. March-delivery soybeans gained 0.9 percent to $14.255 a bushel.

Corn gained to near a 30-month high and soybeans advanced on speculation that imports by China may expand as the yuan appreciates against the dollar, and on optimism its trade relations with the U.S. will improve.

The yuan rose to a 17-year high against the dollar yesterday before Chinese President Hu Jintao?s meeting with President Barack Obama. Hu arrived in Washington yesterday for his first state visit to the U.S.

?The Hu Jintao visit sparked speculation of a revival of China?s corn imports from the U.S.,? Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore. ?The U.S. may also play a bigger role? in meeting China?s soybean import needs, he said.

The visit may improve trade relations that have been strained recently, Ker said.

China, the world?s biggest grains user, began in December an anti-dumping investigation into U.S. shipments of dried distillers? grains, a by-product of corn-based ethanol that?s used in animal feed. Before the investigation, the U.S. filed a complaint at the World Trade Organization against China over support for its wind-energy manufacturers.

U.S. Export Sales

Wheat futures rose for a second day as import demand expands, while adverse weather continues to threaten crops in some of the world?s biggest producers.

March-delivery wheat gained as much as 1.2 percent to $8.03 a bushel in Chicago before trading at $8.0075.

U.S. exporters sold 145,000 metric tons of hard-red winter wheat to Turkey for delivery in the 2010-2011 marketing year that began June 1, the U.S. Department of Agriculture said yesterday. As of Jan. 13, U.S. authorities have inspected 700.7 million bushels of the grain for export, up 36 percent from a year ago, the U.S. Department of Agriculture said yesterday.

Conditions in Kansas, the largest winter-wheat state, ranged from abnormally dry to severe drought, data from the University of Nebraska at Lincoln show. In China, about 4 million hectares of crops have had up to 90 percent less rain than last year, the Xinhua News Agency said. Floods in Australia have delayed shipments and reduced crop quality.

?That sparked concerns that the drought is going to hit China?s crops,? Ker said. ?That may boost imports.?

Ukraine?s wheat harvest fell 19 percent to 16.8 million metric tons in 2010, the State Statistics Office said yesterday. The USDA forecast on Jan. 12 that Ukraine?s output will decline to 17.2 million tons this season, from 20.9 million tons in the previous season.

?Whatever happens in the Black Sea region is a supportive tone to the wheat market,? Ker said. ?These are news that are going to push wheat prices beyond $8 a bushel.?