Corn, Wheat Futures Jump

CHICAGO—The U.S. grain futures Friday increased exports to government data showed foreign buyers took advantage of a recent drop in prices to ensure supply.
Futures soared after the U.S. Department of Agriculture sales reported weekly corn export 1.65 million tonnes. The report was well above analysts' expectations and marked the fourth consecutive week of export sales exceeded one million tonnes. the wheat export sales were strong, as well as Egypt and Japan buying U.S. supplies.
Export data renewed concerns that global demand for crops is not backing down even in the face of high prices for several years and supplies precariously low.
Market prices are "supposed to ration demand, or at least make the demand is not increasing," said Shawn McCambridge, senior grain analyst at Prudential Bache in Chicago, a brokerage firm.
Corn for May delivery briefly reached the limit of 30 cents on Chicago Board of Trade places in the price of a day, before settling up 25.5 cents, or 3.7%, to $ 7.22 a bushel. Soft, future red winter wheat increased by 3.7% to $ 8.1125 per bushel and soybean futures gained 3.4% to close at $ 13.75 a bushel.
Before Friday's rally, wheat futures had been withdrawn from 2 1/2-year highs earlier this month. The future of corn and soybeans had also seen a recent decline.
However, foreign buyers saw the recent softness as a buying opportunity. Many are nervous about the continuing shortages of high quality wheat can be ground into flour. The U.S., the main top grain exporter, is seen as one of the last sources of quality milling wheat to call after a drought reduced output in Russia last summer and heavy rains hurt crops in Australia and Canada .
At the same time, demand for grain used for animal feed is not showing signs of slowing. Sanderson Farms Inc., the U.S. producer poultry fourth largest by revenue, said last week it was reducing production, partly to protect its chicken suppliers. Analysts say competitors Sanderson and Tyson Foods Inc. and Pilgrim's Pride Corp. is likely to keep production at current levels and instead of waiting for small producers to cut.
A stabilization of the crude oil market that helped open the door for Friday's increase on future crops. The rally in energy prices earlier this week pressured agricultural commodities as traders worried about high oil prices will slow global economic growth. In addition, investors back so broader commodities as political unrest in Libya reduced their appetite for risk.
In other commodity markets:
COTTON: Cotton exports from the U.S. since the start of the campaign in August to 17 February was 6.79 million bales, up from 4.50 million bales in the same time last year, according to the USDA. Cotton for March delivery rose 10.06 cents, or 5.5%, to $ 1.9134 a pound on the ICE U.S.
CRUDE OIL: Futures rose, ending near $ 98 a barrel as oil markets remain focused on the riots in Libya. Oil gained 9.1% in the week marked by wild price swings due to uncertainty about how much oil production in the North African country has been arrested. Light, sweet crude for April delivery settled up 60 cents, or 0.6%, to $ 97.88 a barrel on the New York Mercantile Exchange. ICE April Brent closed 0.7% higher at 112.14 dollars a barrel.

(Source: http://online.wsj.com/article/SB10001424052748704692904576166843954920176.html)