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Markets

Corn firms after 2-session decline as strong China demand supports

  • Chicago corn recovers on Chinese demand, US crop conditions.
  • US corn planting 90% complete, soybean planting 75% - USDA.
25 May, 2021

SINGAPORE: Chicago corn futures rose on Tuesday, recouping some of the losses suffered in the previous two sessions, with strong demand from China underpinning prices.

Soybeans rose for the first time in six sessions while wheat recovered from a one-month low touched on Monday.

"There is strong demand led by China that is likely to support prices," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.

"We have still not dealt with the South American crop issues. We think the underlying supply-and-demand fundamentals are still tightening. We are more likely to see strong rallies over the next few months, rather than large drop in prices."

The most-active corn contract on the Chicago Board Of Trade (CBOT) was up 0.2% at $6.58-1/4 a bushel by 0207 GMT, having closed 0.3% lower in the previous session.

Soybeans were up 0.8% at $15.35-1/2 a bushel, having closed down 0.2% in the previous session when prices hit April 30 low of $15.06 a bushel.

Wheat gained 0.7% at $6.66-3/4 a bushel, having hit April 20 low of $6.53 a bushel in the last session.

China has been boosting purchases of US corn, supporting prices.

The US Department of Agriculture (USDA) said US farmers had planted 90% of their intended corn acres, as of Sunday, just below the average estimate in a Reuters analyst poll of 91%.

Soybean planting was 75% complete by Sunday, the USDA said, up from 61% a week earlier. The figure was behind the average analyst estimate of 80% but ahead of the five-year average of 54%.

"Despite the efficient start for the US Crop Watch producers, many of the fields have not exactly benefited from the early planting due to cool temperatures and/or dry conditions following planting," Karen Braun, a market analyst for Reuters, wrote in a column.

"This has led to slow and even spotty emergence in some places, but most of the growers believe those sins could be healed with some favorable weather in the near-term."

The USDA rated 47% of the US winter wheat crop in good-to-excellent condition, down 1 percentage point from the previous week, defying the average analysts' expectations for a two-point improvement.

Wheat futures retreated after crop scouts on an annual tour last week projected record-high yields in Kansas, the top winter wheat state.

Commodity funds were net sellers of CBOT corn, soybeans, wheat, soymeal and soyoil futures contracts on Monday, traders said.

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