CHICAGO: US corn futures climbed for a second straight session on Monday as tight supplies of grain harvested last autumn and strong cash markets rallied the benchmark May contract more than 2 percent, the strongest gain in nearly two months.
Wheat followed corn higher, adding more than 1 percent, while soybeans drifted lower on spread activity, with traders buying corn and selling soybeans.
Chinese feed mills were keen on importing US corn as domestic prices of the grain were at a steep premium to imports, although cash traders could not confirm that any fresh deals have been signed.
Talk of potential demand from China for US corn after rumors of a large sale on Friday were further fueled by news that Argentina, the world's No. 2 corn exporter, may restrict exports of the grain.
"There's a lot of optimism about the corn sale to China that was rumored on Friday and news that Argentina was going to possibly restrict corn exports made for a positive combination," said Alan Kluis, president of Kluis Commodities.
"The March contract goes off the board on Wednesday and somebody wants cash corn with the way the March went to a premium to May. Until the March corn breaks, the path of least resistance is higher," he said.
Chicago Board of Trade March corn gained 2.2 percent to $6.68-1/4 per bushel by 11:30 a.m. CDT (1630 GMT) while the actively traded May contract was up 1.9 percent at $6.57-1/2 in the strongest two-day gain since late December.
BULL SPREADING IN CORN
New-crop corn futures were capped by bull spreading amid expectations for a big jump in US seedings this spring that were expected to nearly double stocks of the grain from current forecasts for them shrinking to a 16-year low by the end of the summer.
"The cash market continues to hold together well. Traders are looking to buy the old-crop because of that and they'll sell the new-crop based on 95.5 million acres, according to Informa on Friday," said Bryan Doherty, senior market advisor with Stewart-Peterson.
The US Midwest grain belt has warmed up this week, an early sign of spring, which may give farmers the opportunity to get started early on planting.
Analysis firm Informa Economics raised its US corn seeding estimate to 95.5 million acres (38.7 million hectares) from 94.7 million acres, according to trade sources.
Informa also bumped up US soybean plantings to 75.1 million acres from 74.6 million acres, the trade said, and trimmed all-wheat plantings to 57.7 million acres from 57.9 million acres.
The US Department of Agriculture will issue results of its first survey-based acreage estimates in its so-called planting intentions report on March 30.
Soybean prices drifted lower on light profit-taking after hitting 5-1/2 month highs last week and by spread activity.
CBOT May soybeans eased 0.1 percent higher to $13.37 a bushel while new-crop November was down 0.3 percent at $13.01-1/4.
CBOT wheat for May delivery was up 1.3 percent at $6.51-1/4 a bushel, propelled by firmer corn.
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