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Corn rises on signs China will start to import
By Jeff Wilson Bloomberg News
CHICAGO: Corn prices hit a three-month high Thursday after China signaled that it could become a net importer for the first time in more a decade.
China, one of the world's four biggest corn exporters last year, will encourage more imports of the grain and discourage domestic output of crop-based fuels, the National Development and Reform Commission said. China may import more corn because domestic supply may fall short of demand for livestock feed, said the NDRC, the top economic planning body in China.
"China appears to be getting out of the corn-export business," said Greg Wagner at Horizon Ag Strategies. "We have the strongest fundamental base in grains and oilseeds since 1995-1996," the last time China became a net importer of the grain.
Corn futures for December delivery rose 11 cents to $3.6925 on the Chicago Board of Trade, after earlier rising to $3.7325, the highest level since June 27.
Demand for corn in China will rise 14.5 percent while output will gain 3.5 percent by the end of the five-year plan in 2010, the NDRC said.
Meanwhile, crude oil rose to a record $83.90 a barrel in New York on signs that U.S. interest-rate cuts and a falling dollar would bolster demand.
Crude oil for October delivery climbed 1.39 cents to $83.32 a barrel on the New York Mercantile Exchange, after touching $83.90, the highest level since trading began in 1983. The October contract expired at the end of trading Thursday.
"The fundamentals don't justify these prices, but the prices are holding firm," said Tom Bentz, a broker at BNP Paribas in New York. "We are due for a correction but nobody is willing to step in front of this."
Gold spiked to a 27-year high as dollar and bond price weakness fueled demand for the metal as an inflation hedge.
Gold futures for December delivery rose $10.40 to $739.90 an ounce on the Comex division of the New York Mercantile Exchange. Earlier they rose to $746.50, the highest for a most-active contract since Jan. 22, 1980.
"If the Fed has to cut interest rates again, gold could take off to $1,000," said Tom Winmill, president of Midas Management in New York. |
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