Corn within sight of 33-month high

Corn may advance to the highest level in 33 months, while wheat and soyabeans gained, on concern that global supplies of grains may fail to keep pace with demand, draining inventories.

Corn for May delivery in Chicago gained as much as 0.3% to $7.625 a bushel after climbing to $7.65 yesterday, the highest level since July 2008. Futures more than doubled in the past year and traded at $7.6175 at 2:42 pm in Singapore . Wheat advanced as much as 1% to $7.98 a bushel, the highest level for the most-active contract since March 8, before trading at $7.9175. Soyabeans gained 0.1% to $13.86.

The US winter-wheat crop had the lowest government rating in nine years as dry weather persists in the southern and central plains, a U.S. Department of Agriculture report said on Monday. Stockpiles of corn in the US on March 1 dropped to 6.52 billion bushels, the lowest for that date in four years, the USDA said in a report on March 31.

“These two reports add to fears that we are going to face the more critical situation of a food crisis,” Ker Chung Yang, a commodity analyst at Phillip Futures Pte, said by phone from Singapore. “We are likely to see panic-buying.”

About 37% of the US winter-wheat crop was rated good or excellent as of April 3, down from 65% a year earlier, the USDA said in its first reading this year measuring conditions. The reading was the lowest for the date since 2002, when 31% got the top ratings.

Parts of Texas, Oklahoma, Kansas and Colorado had less than 25% of normal rainfall in the past 30 days, according to the National Weather Service . As of April 3, about 12% of the Texas crop was in good condition, with no excellent rating. In Kansas, the biggest winter-wheat growing state, 31% of the crop was rated good to excellent.

“It’s painting a poorer picture that will raise increasing fears that hot and dry weather may hurt production in the plains,” Phillip Futures’ Ker said. “For the wheat market we have these bullish factors.”

Gains in oil prices are also supporting corn and soya, which are used to make biofuels, Ker said. Crude oil advanced to the highest settlement since September 22, 2008, on Monday and is up 25% from a year ago.

In a report due April 8, the USDA may lower its estimate for inventories in the year ending August 31 because of increasing demand for feed and ethanol, said Rich Nelson, the director of research at Allendale Inc. in McHenry, Illinois.

(Source: http://www.financialexpress.com/news/corn-within-sight-of-33month-high/772235/0)