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Chicago corn rallies on bullish U.S. key reports

13 July 2011 00:47 (UTC +04:00)

Baku-APA. Chicago corn posted a strong rally on Tuesday after the U.S. government released the bullish reports on grain supply and stocks as well as the crop acreage. Meanwhile, wheat and soybeans also hiked on spillover effect from corn, APA reports quoting Xinhua.

The most active corn contract for December delivery hiked 25.25 cents, or four percent, to close at 6.58 U.S. dollars per bushel. September wheat gained 32.75 cents, or five percent, to 6.72 dollars per bushel. November soybean added 11.25 cents, or 0.84 percent, to 13.5825 dollars per bushel.

Market analysts said that the reports released by U.S. Department of Agriculture (USDA) on Tuesday was considered bullish to corn, as the corn inventory for both 2010/2011 and 2011/2012 marketing year are much lower than earlier expectations and the stock/usage ratio also remained tight.

Besides, the corn usage for feed, ethanol and exports were all revised higher, which, coupled with some positive export news, all helped support the market.

On the wheat market, although USDA’s reports were seen as neutral to slightly bearish, as the ending stocks of wheat is apparently higher than expectation, the wheat gained strength from spillover effect from corn as well as the anxiety over the weather forecasts.

Meanwhile, soybean market also got little support from USDA’s report, which is generally considered neutral. But it is buoyed up by near term hot and dry weather in the Midwest, which could stress the crop growth and thus, add premium to the price.