Chicago corn and wheat prices continued to rise for the fourth consecutive session on Tuesday, as rumors that Russia and Argentina planned to limit grain exports sparked aggressive buying in both futures and cash market. Soybean ended a tad higher.

The most active corn contract for March delivery added 10.25 cents, or 1.7 percent, to close at 6.3025 U.S. dollars per bushel. March wheat rose 13.75 cents, or 2.2 percent, to 6.335 dollars per bushel. March soybean added 2.5 cents, or 0.2 percent, to close at 12.2 dollars per bushel.

Trader said rumors that Russia would tax exports lifted wheat prices, while rumors that Argentina may ban exports fueled the corn rally and triggered near panic buying in the cash corn market in the U.S. Midwest and at the gulf for export, although neither rumor was confirmed.

"We do have corn basis very strong right now, especially out here in the Midwest we were looking at a level 25 to 30 cents above the board. This is the highest in many years," said Frank Lesh with Future Path Trading.

"Producers, of course, holding out for higher prices and those users, who want that product is trying to beat up that market, take that corn out of producers' hands for right now," Lesh added.

Meanwhile, the prospect for Asia's sustained strong demand for U.S. grains, also offered support to prices, as Asian business accounts for some 70 percent of U.S. feed grains exports in recent years, traders said.

"With the Asian lunar new year holiday this week, we don't expect China to show up as a buyer. But, if China sees South American weather problems as permanent, they could speed their purchases," said Tim Hannagan, a grain specialist with PFGbest here in Chicago.

It is reported that drier parts of Argentina received 1.5 to 2. 5 inches of rain in last 24 hours, which could boost soybean crop conditions, as soybeans are in the heart of their pod setting stage when yields are most affected by weather.

Go to Forum >>0 Comment(s)