Chicago | Reuters — U.S. corn futures rose more than two per cent on Friday and set a multi-year high after China booked its biggest purchase of U.S. corn to date, fueling expectations of tightening global supplies.
Wheat futures also rose about two per cent, chasing corn higher, and soybeans firmed as well.
Chicago Board of Trade March corn settled up 12-1/2 cents at $5.47 per bushel after reaching $5.53-3/4, the highest price on a continuous chart of the most-active contract since June 2013 (all figures US$).
CBOT March wheat ended up 16 cents at $6.63 a bushel and March soybeans settled up 16-3/4 cents at $13.70 a bushel.
For the month of January, CBOT corn rose 63 cents a bushel or 13 per cent, including a gain of 46-1/2 cents in the last week. Soybeans advanced 4.5 per cent for the month and wheat rose 4.4 per cent.
Corn futures jumped Friday after the U.S. Department of Agriculture confirmed private sales of 2.108 million tonnes of U.S. corn to China. It was the second-biggest daily corn sales announcement on record, eclipsed only by a deal for 3.72 million tonnes to the Soviet Union in 1991.
The latest sale followed deals earlier this week that netted China a combined 3.74 million tonnes of U.S. corn.
Already the world’s top soy importer, China is buying corn to help rebuild its massive hog herd. Chinese corn imports could climb to between 25 million and 27 million tonnes in the current 2020-21 crop year, including up to 20 million tonnes from the U.S., Dan Basse, president of Chicago-based AgResource Co., said this week.
Soybean futures followed corn higher, with worries about poorly timed rains in Brazil lending support.
“It’s a wet forecast for Brazil, which means possible (soybean) harvest delays, and also means that they won’t be able to get their product out as quickly. That could open up the door for U.S. business,” said Brian Hoops, president of Midwest Market Solutions.
Wheat futures also advanced, given that tightening corn supplies could drive up demand for wheat as livestock feed.
However, agriculture consultancy Sovecon raised its forecast for Russia’s 2020-21 wheat exports by 1.6 million tonnes, to 37.9 million tonnes, citing current high export levels. Russia is the world’s top wheat supplier.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Enrico Dela Cruz in Manila.