Corn up on speculation for better Chinese demand

AP News
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Posted: Mar 12, 2012 4:10 PM
Corn up on speculation for better Chinese demand

Corn prices rose Monday as exporters and other suppliers bought more contracts because of speculation that China may buy more of the grain from the United States.

As soon as the market opened, commercial buyers began increasing holdings in hopes of having an ample supply to meet what is expected to be higher demand.

Corn for May delivery rose 14.5 cents, or 2.2 percent, to finish at $6.595 per bushel after earlier hitting $6.615 per bushel. The gain came as prices for most metals and energy products fell after China reported slower growth in February for imports and exports, which indicated weakening demand in the world's second-largest economy.

"Global economics really have not slowed the increase in demand for corn and soybeans," Telvent DTN analyst Darin Newsom said.

In other May contracts, wheat rose 8.25 cents to end at $6.5125 per bushel while soybeans fell 3.25 cents to $13.345 per bushel.

Other commodities were mostly lower because of concerns about the global economy.

China's export growth in the combined January-February period slowed to 6.9 percent, compared with the same two months in 2011. The total was barely half of December's 13.4 percent rate. Imports for the two months rose 7.7 percent, down from December's 11.8 percent.

Analysts look at the combined period to offset the impact of the Lunar New Year, which comes at different times in January or February each year, distorting trade figures as producers rush to fill orders before closing for two weeks or more.

China is a huge importer of raw materials, from oil to copper, corn and soybeans.

Copper for May delivery fell 2 cents to finish at $3.84 per pound.

In other metals trading, April gold declined $11.70 to end at $1,699.80 an ounce, May silver fell 80 cents to $33.41 per ounce, April platinum rose $10.80 to $1,695.70 an ounce and June palladium fell $5.70 to $704.25 an ounce.

Benchmark oil fell $1.06 to end at $106.34 per barrel on the New York Mercantile Exchange. Heating oil declined 2 cents to $3.24 per gallon, gasoline futures fell 1 cent to $3.32 per gallon and natural gas ended down 5 cents at $2.27 per 1,000 cubic feet.