Chicago corn recovers on strong export demand for U.S. supplies

February 17, 2012 9:14 am 

CHICAGO, Feb. 17 — Chicago corn prices bounced back on Thursday, on strong U.S. export demand and a decline in the U.S. dollar. Wheat also recovered, amid trade expectations that recent lower prices will attract strong demand. Soybean dropped as U.S. weekly export sale data disappoints.

The most active corn contract for March delivery added 9.25 cents, or 1.5 percent, to close at 6.3625 U.S. dollars per bushel. March wheat rose 2.75 cents, or 0.4 percent, to 6.2875 dollars per bushel. March soybean dropped 2.75 cents, or 0.2 percent, to close at 12.5825 dollars per bushel.

According to the U.S. Department of Agriculture, last week's export sales for corn reached 1,067,400 metric tons, up from last week's 694,000 metric tons, and above the 4-week average of 830,000 tons.

"Though China was absent, Egypt took 240,000 (metric tons) and Mexico for 415,000 (metric tons) were the big players. Mexico's drought has had them buying U.S. corn for 11 consecutive weeks. The drought continues, so we expect the demand to continue as well", said Tim Hannagan, a grain analyst with PFGBEST here in Chicago.

According to USDA, soybean sales last week only reached 614,700 metric tons, 28 percent lower from the week prior, and well below trade expectation.

Some traders anticipated that there will be more announced agreements for China to purchase U.S. soybeans this week on top of the 8.62 million agreed on late Wednesday.

Weather forecast predicts a good soaking of 3 to 5 inches through Sunday in central and eastern Argentina, the big producing areas of Buenos Aires and La Pampa with 70 percent coverage and another 1 to 2 inches Monday to Thursday.

Meanwhile, corn also came under pressure on Thursday, as a protocol on exporting corn and corn products from Argentina to China was signed on Wednesday in Buenos Aires, which potentially offers an alternative to U.S. supplies. (PNA/Xinhua) DCT/ebp

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