Chicago corn, soybeans resumed rally Monday on concerns that U.S. corn and soybean production this year may fail to meet demand, as U.S. Department of Agriculture (USDA) dramatically lowered the crop supply estimate last Friday.
The most active corn contract for December delivery surged 27.5 cents, or 5.2 percent, to 5.5575 U.S. dollars per bushel. December wheat dropped 10 cents, or 1.4 percent, to 7.0925 dollars per bushel. November soybean added 17.5 cents, or 1.5 percent, to 11. 525 dollars per bushel.
December corn surged during overnight session, reaching the expanded 45 cent limit, but gradually gave back parts of its earlier gains, and closed 17.5 cents off the high. While November soybean finished 36.25 cents off the high.
“We saw market opened up very firm but then faded throughout the session, with profit-taking following Friday’s extraordinary news with the corn leading across the board,”said Matthew Pierce from PitGuru.com.
Pierce credited profit-taking for the massive reversal in corn and soybean and the huge volatility across the entire floor, since there was no fresh information. “I believe that it was the lack of momentum that allowed the profit-taking to come in,” Pierce added.
A trader mentioned the overall scenario moving into the rest of the week would be dictated by the macro factors with the fundamental side relatively quiet, and the market will remain quite bullish this week.
The USDA on Friday cut the crop supply estimate both in U.S. and the world more than expected, fueling concerns over tight corn supplies, as the USDA slashed projected 2010-11 ending corn supplies below 1 billion bushels and projected 2011 ending stocks to use ratio at a 15-year low. (PNA/Xinhua)