US MIDDAY: corn, wheat jump

US corn futures rose for a sixth straight session on Wednesday to touch a 28-month high, while soyabeans hit a 5-1/2 week peak on strong Chinese demand prospects and concerns that weather would cut Argentine crops. Wheat jumped more than 2 percent to a 4-1/2 month high on technical buying in very thin, holiday-week trade, shrugging off earlier pressure stemming from an improved Australian wheat harvest pace.
"China's commerce minister's statement that China will be buying commodities next year, I think that got everything going. They're buying beans, and corn would be the next logical purchase to come, maybe sometime in the spring," said Paul Haugens, vice president for Newedge USA.
China is expected to import more agricultural commodities in 2011 as the government covers shortages and replenishes stocks drawn down this year as the country grappled with soaring demand. The commerce minister offered no details on import targets, but stocks of corn, sugar and cotton were believed to be below one month's supply. Dryness in key corn and soyabean producer Argentina also held market attention as much-needed weekend rains fell short in some areas and with hot weather in the near-term forecast.
An Argentine soya-possessing plant worker strike underpinned soya product prices and helped to keep a floor under soyabean values, but the stoppage may be resolved soon. Corn drew support from a report by the Energy Information Administration that showed another strong week of ethanol production. "The ethanol numbers that came out this morning were a little smaller than last week's but still enormous, and that is serving to keep corn fairly supported," said Sterling Smith, analyst with Country Hedging.
Chicago Board of Trade March corn gained 0.7 percent to $6.06-1/2 a bushel by 12:22 pm CST (1822 GMT) after rising as high as $6.08-3/4, the loftiest since August 2008. CBOT January soyabeans rose 0.25 percent to $13.29-1/2, the highest since November 12. Wheat surged to the highest point since early August as front-month futures breached a technical level near $7.70 a bushel, which triggered a wave of chart-based buying. The thin holiday-week trading volume amplified the rally.
At midday, wheat trading volume was estimated at about 36,000 contracts, down more than 60 percent from the 30-day average, according to Reuters data. The wheat market remained underpinned by dry weather in the US Plains wheat belt and concerns about the Australian wheat crop after heavy harvest-time rains, although Australia's harvest pace has accelerated with drier weather this week.
"I think in wheat it's the same thing we've been talking about for a month, the dryness in the Plains and the quality problems in Australia. Also, the volume is really low so it doesn't take much to rally it," said Shawn McCambridge, analyst for Prudential Bache Commodities. CBOT March wheat jumped 2.2 percent to $7.81-3/4 a bushel, the highest since August 6.