CHICAGO, Sep. 13, 2010 (Xinhua News Agency) -- Chicago corn futures rose to 23- month high Monday on speculations that rising export demand and a potential reduction in crop production would further tighten corn supplies in U.S.
Wheat and soybean price both moved higher, as a weaker dollar and strong rally in commodity and equity markets set a positive tone for grain futures.
December corn rose 5.25 cents, or 1.1 percent, to 4.835 U.S. dollars per bushel. Earlier, the price reached 4.865 dollars per bushel, the highest level for a most-active contract since October 2008. December wheat added 8.25 cents, or 1.1 percent, to 7.45 dollars per bushel. Earlier, the price reached 7.545 dollars per bushel, the highest level for a most-active contract since Aug. 13. November soybean climbed 3.5 cents, or 0.3 percent, to 10.345 dollars per bushel.
Global stocks and commodity markets climbed on optimism over global economic recovery, as China's upbeat economic data and the new bank rules which were less restrictive than expected fueled investors'risk appetite. Meanwhile, the tumbling dollar also lent support to the grain markets as it enhances the competitiveness of U.S. agricultural exports in the International markets.
USDA announced on Monday that last week's export inspection for corn were 36.3 million bushels, trader noted that although the weekly inspection number was a little bit disappointed, corn received strong support on Monday as many investors expected USDA to further cut its U.S. corn yield estimates which will resulted in an even tighter supply/demand situation given the current strong export demand for U.S. corn. USDA projected last Friday the corn inventories before the 2011 harvest as a percentage of use will drop to a 15-year low.
Trader noted that the adverse weather once again emerged as the major factor behind wheat's rally on Monday, as the hot, dry spell in southwestern Australia, colder temperature in Canada as well as dryness in wheat-growing region in parts of former Soviet Union has put extra pressure on the local wheat crops.
The stronger crude oil price has given support to soybean price, but it still lagged behind gains in corn and wheat during most of the session on Monday, pressured by the USDA's projection of a record high U.S. soybean yields and larger-than-expected 2010/11 soybean ending stocks.
