US corn and wheat rallied on Thursday to their biggest daily percentage gains in three weeks, lifted by talk of China buying US corn, after grains dropped sharply during the previous session. Soyabeans also rose on Chinese export demand after the US Department of Agriculture reported a fresh old-crop sale of 110,000 tonnes and US weekly export sales were above trade expectations.
"We took (corn) prices down hard over the past couple of weeks and we started to hear of increased interest not only from China, but others," said Shawn McCambridge, analyst at Jefferies Bache in Chicago. "There's probably some legitimacy behind this kind of talk - I would anticipate the low we hit did generate some business." Chicago Board of Trade May corn gained 19-1/4 cents, or 3.2 percent, to $6.21 a bushel, after falling to a three-month in low the previous session.
Corn is likely to attract buying on the dips until the level of new-crop 2012/13 production is clearer, McCambridge said, noting that weekly export sales reported on Thursday showed little demand last week at high prices. May soyabeans added 8 cents, or 0.6 percent, to $14.15-3/4 a bushel. USDA reported export sales of US soyabeans in the latest week at 1.219 million tonnes, for the old- and new-crop years combined, above a range of trade expectations for 850,000 to 1.1 million tonnes.
Chicago May wheat advanced 14 cents, or 2.3 percent, to $6.24-3/4 a bushel, on short-covering spurred by the rebound in corn and soyabeans. The USDA's weekly export sales report showed net export sales of US corn last week at 298,000 tonnes, below estimates for 700,000 to 950,000 tonnes.
Drought has hit South American corn and soybean production, and on Thursday Argentina's government cut its soy and corn production estimates, dropping both more than 10 percent below last year's harvest levels. Old-crop US corn supplies were expected to shrink to the lowest in 16 years by the end of the summer but could be replenished in the next US harvest, if farmers plant the largest corn area since 1944 as forecast. Despite those big acreage projections, new-crop December corn posted healthy gains, albeit smaller than nearby months, with concerns about dryness lingering in US planting areas, said Mike Zuzolo, grains analyst at Global Commodity Analytics.
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