Corn, Wheat Advance as 9.5% Price Decline Attracts Importers, Investors

Corn and wheat climbed for the first time in three days on signs that a price slump prompted byJapan’s strongest earthquake on record and subsequent tsunami is spurring demand from importers. Soybeans rose for a second day.

Corn for May delivery gained as much as 1.7 percent to $6.2725 a bushel and traded at $6.24 a bushel at 10:29 a.m. Seoul time on the Chicago Board of Trade. The price plunged to the lowest in two months yesterday. Wheat for May delivery climbed 1.2 percent $6.7 a bushel after yesterday touching $6.56, the lowest since Oct. 6.

Corn and wheat have slumped 8.5 percent and 9.5 percent since the day before the March 11 earthquake on speculation that the quake, tsunami and the risk of radiation from a damaged nuclear plant would reduce demand from Japan, the world’s biggest buyer of corn.

“End-users snapped up purchases after values tumbled, which is helping prices creep up,” said Han Sung Min, a senior trader at Seoul-based Korea Exchange Bank Futures Co. “The rebound may be short-lived because investors remain jittery, monitoring to what extent the disaster will impact the market.”

Feed-makers including the Korea Feed Association in South Korea, the world’s third-biggest corn buyer, purchased 110,000 metric tons of corn and 165,000 tons of soybean meal in tenders yesterday. The Major Feedmill Group plans to buy 190,000 tons of corn in a tender today, the most sought by the group in a single bidding since August.

Grain demand in Japan is unlikely to decline after the disaster, according to the United Nations’Food and Agriculture Organization.

Soybeans for May delivery increased 0.3 percent to $12.905 a bushel after yesterday gaining 1.3 percent, the most since March 2. The price for the most active contract dropped 5.4 percent this month. As much as 2 inches (5.1 centimeters) of rain in the past 24 hours left fields too wet for harvesting in Brazil, the second-biggest exporter, World Weather Inc. said in a report yesterday.

(Source: http://www.bloomberg.com/news/2011-03-17/corn-wheat-advance-as-9-5-price-decline-attracts-importers-investors.html)