Soybeans commodity for March delivery gained 2.4 percent to $11.8575 a bushel at 9:56 a.m. London time on the Chicago Board of Trade, the first gain since Jan. 9. The most-active contract dropped 3.2 percent last week.
Corn for March delivery rose 1.9 percent to $6.1075 a bushel after slumping 6.8 percent last week. A close at that price would be the biggest gain since Dec. 27. Trading in Chicago was closed yesterday for the Martin Luther King Jr. holiday in the U.S.
Soybeans and corn advanced for the first time in a week on speculation that China will ease monetary policy after the economy expanded at its slowest pace in 10 quarters, potentially boosting demand for raw materials.
China’s gross domestic product rose 8.9 percent in the fourth quarter from a year earlier, the statistics bureau said today. China may ease lending curbs and increase spending to bolster the world’s second-biggest economy, boosting demand for grains and oilseeds, said Gary Mead, an analyst at VM Group.
“This must be a reaction to China’s GDP being about what people thought it would be,” Mead said by phone from London today. “China’s tight monetary policy might be eased and therefore Chinese demand will begin to rise.”
Prices also gained as drought caused by La Nina persists in South America, threatening to curb global supply further.
Corn and soybean crops in Brazil’s southernmost state of Rio Grande do Sul will be harmed by more dry weather in the next 10 days, weather forecaster Somar Meteorologia said yesterday. In Argentina, the second-largest corn shipper, a heat-wave was forecast over the next two weeks and little rain was expected, said Maximiliano Zavala, a forecaster at the Buenos Aires Cereals Exchange.
Corn output in Argentina will probably drop to 21.4 million metric tons in the current growing season, “significantly” lower than expected, after dry weather damaged the crop, the Rosario Cereals Exchange said Jan. 13. That’s about a third less than the 30 million tons expected by Argentine corn group Maizar in November, before the drought began.
“There’s a question over the size of the South American crop,” Mead said. “It’s still early and it’s not ruined but some damage will be done.”
Corn for March delivery rose 1.9 percent to $6.1075 a bushel after slumping 6.8 percent last week. A close at that price would be the biggest gain since Dec. 27. Trading in Chicago was closed yesterday for the Martin Luther King Jr. holiday in the U.S.
Soybeans and corn advanced for the first time in a week on speculation that China will ease monetary policy after the economy expanded at its slowest pace in 10 quarters, potentially boosting demand for raw materials.
China’s gross domestic product rose 8.9 percent in the fourth quarter from a year earlier, the statistics bureau said today. China may ease lending curbs and increase spending to bolster the world’s second-biggest economy, boosting demand for grains and oilseeds, said Gary Mead, an analyst at VM Group.
“This must be a reaction to China’s GDP being about what people thought it would be,” Mead said by phone from London today. “China’s tight monetary policy might be eased and therefore Chinese demand will begin to rise.”
Prices also gained as drought caused by La Nina persists in South America, threatening to curb global supply further.
Corn and soybean crops in Brazil’s southernmost state of Rio Grande do Sul will be harmed by more dry weather in the next 10 days, weather forecaster Somar Meteorologia said yesterday. In Argentina, the second-largest corn shipper, a heat-wave was forecast over the next two weeks and little rain was expected, said Maximiliano Zavala, a forecaster at the Buenos Aires Cereals Exchange.
Corn output in Argentina will probably drop to 21.4 million metric tons in the current growing season, “significantly” lower than expected, after dry weather damaged the crop, the Rosario Cereals Exchange said Jan. 13. That’s about a third less than the 30 million tons expected by Argentine corn group Maizar in November, before the drought began.
“There’s a question over the size of the South American crop,” Mead said. “It’s still early and it’s not ruined but some damage will be done.”
Corn prices in Chicago may average $6.60 a bushel in the 2011-2012 marketing year, down from a previous estimate of $7.25, according to Morgan Stanley. Corn may be “one of the weaker commodities in 2012,” partly because of record supplies from South America in the first quarter, Hackett Financial Advisors said Dec. 2.
Corn prices in Chicago slipped 1.9 percent last week after the USDA on Dec. 9 raised China’s corn output estimate for this year by about 7 million tons from a previous outlook to a record 192 million tons, in line with China’s official estimate.
It’s “a joke” that the USDA adopted this figure given China’s limited yield and land, Feng said. Yigu projected 170 million tons, compared with 166 million tons by Shanghai JC and 189.2 million tons by Geneva-based SGS SA.
Corn prices in China will be “range-bound” between 2,200 yuan and 2,400 yuan a ton in the next few months, Yigu’s Feng said. China said Dec. 19 it would buy domestic corn to support farming. The policy effectively sets a price floor of about 2,200 yuan in Dalian, the price-setting center in China, said Feng. Shipping to Shenzhen from Dalian is about 40-60 yuan a ton, according to Shanghai JC.
The upper range of next year’s domestic price depends on feed demand from the livestock industry and corn processors, said Feng. The government may allow a gain of 100 yuan to 200 yuan for increased production costs, he said.
Corn prices in Chicago slipped 1.9 percent last week after the USDA on Dec. 9 raised China’s corn output estimate for this year by about 7 million tons from a previous outlook to a record 192 million tons, in line with China’s official estimate.
It’s “a joke” that the USDA adopted this figure given China’s limited yield and land, Feng said. Yigu projected 170 million tons, compared with 166 million tons by Shanghai JC and 189.2 million tons by Geneva-based SGS SA.
Corn prices in China will be “range-bound” between 2,200 yuan and 2,400 yuan a ton in the next few months, Yigu’s Feng said. China said Dec. 19 it would buy domestic corn to support farming. The policy effectively sets a price floor of about 2,200 yuan in Dalian, the price-setting center in China, said Feng. Shipping to Shenzhen from Dalian is about 40-60 yuan a ton, according to Shanghai JC.
The upper range of next year’s domestic price depends on feed demand from the livestock industry and corn processors, said Feng. The government may allow a gain of 100 yuan to 200 yuan for increased production costs, he said.
High consumption of corn commodity make China import corn about 7 million tons in 2012-2013 after 4 million metric tons in 2011-2012. Soybean imports will likely rise 12% on year in 2011-12 to 58.5 million tons under a baseline scenario, and by 15% or more to exceed 60 million tons in best-case.
Sleeping in China Economy next year is unlikely to weaken the country's agricultural demand, since the government can secure global supplies to replenish low domestic inventories. As inflation eases and crush margins improve, Rabobank forecast a rebound in China palm oil demand in 2011-12, up 5% to a record 6 million tons.
In the U.S., Corn basis levels at the U.S. Gulf slipped 3 cents for the spot month. Soybean Gulf basis levels, however, jumped 1 to 5 cents versus futures, according to U.S. Department of Agriculture data. Cash grain markets remain strong versus futures prices, but could begin to soften as grain begins to move more freely.
A lack of farmer selling has boosted cash market prices and limited losses in futures throughout the fall. Expectations that prices could go higher and farmers' stable financial positions after a year of sharply higher crop prices have encouraged farmers to hold on to supplies.
In first week December 2011 Cash corn's Chicago Board of Trade futures shrunk to 8 1/2 cents, from 11 1/2 cents at the start of the week, according to a national cash grain index maintained by the Minneapolis Grain Exchange. Cash soybeans' discount to January CBOT futures shrunk 1 1/2 cents during that time period, to 43 1/2 cents.
Sleeping in China Economy next year is unlikely to weaken the country's agricultural demand, since the government can secure global supplies to replenish low domestic inventories. As inflation eases and crush margins improve, Rabobank forecast a rebound in China palm oil demand in 2011-12, up 5% to a record 6 million tons.
In the U.S., Corn basis levels at the U.S. Gulf slipped 3 cents for the spot month. Soybean Gulf basis levels, however, jumped 1 to 5 cents versus futures, according to U.S. Department of Agriculture data. Cash grain markets remain strong versus futures prices, but could begin to soften as grain begins to move more freely.
A lack of farmer selling has boosted cash market prices and limited losses in futures throughout the fall. Expectations that prices could go higher and farmers' stable financial positions after a year of sharply higher crop prices have encouraged farmers to hold on to supplies.
In first week December 2011 Cash corn's Chicago Board of Trade futures shrunk to 8 1/2 cents, from 11 1/2 cents at the start of the week, according to a national cash grain index maintained by the Minneapolis Grain Exchange. Cash soybeans' discount to January CBOT futures shrunk 1 1/2 cents during that time period, to 43 1/2 cents.
