Forexpros – Corn futures rallied for a third day on Tuesday, trading at a six-day high after Argentina said it will delay granting more export permits for the grain until April and amid speculation of increased demand from China.
On the Chicago Mercantile Exchange, corn futures for May delivery traded at USD6.6288 a bushel during European morning trade, gaining 0.5%.
It earlier rose by as much as 1.05% to trade at USD6.6438 a bushel, the highest since March 5.
Corn prices added to Monday’s 2% gain after Argentina’s Agriculture Minister Norberto Yauhar said the country will delay granting more export permits for the grain until April as it studies crop damage caused by a drought.
The government will issue permits on April 19 that will surpass the 7.5 million ton allocation that has already been granted, Yauhar said.
A second and final issuance of permits will take place within 60 days, he said.
The government estimates this year’s corn harvest will total between 21 and 22 million metric tons. Rains in January and February were not sufficient to improve parched crops that were damaged by a drought late last year.
Prices were further supported as a strike of Argentine dock workers at the country’s main grains port in Rosario entered its eleventh day, slowing shipments of the grain.
Argentina is the world’s second largest corn shipper and competes with the U.S. for business on the global market. Downbeat Argentinean crop prospects could boost demand for U.S. supplies, which is the world’s largest corn producer and biggest exporter.
Meanwhile, speculation that China will boost corn imports mounted after Standard Chartered said in a report Monday that the Asian nation was at “a tipping point” between its history of self-sufficiency in corn and a future of structural imports.
The report, published after a tour of corn fields in China, said that, “Last year saw the first significant imports of corn in years and nearly everyone in the sector expects imports to grow. It is just a question of how fast.”
Wall Street investment bank Goldman Sachs added to the bullish sentiment on the grain, saying it was “most constructive on corn prices in the near-term”.
The bank expected corn prices to average USD6.90 a bushel in the next three months.
“Unchanged feed demand, and higher ethanol and export demand, will require higher corn prices in the near-term,” the report said.
Elsewhere on the Chicago Mercantile Exchange, wheat for May delivery rose 0.55% to trade at USD6.5563 a bushel, while soybeans for May delivery climbed 0.9% to trade at USD13.4625 a bushel.
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