Indiana Grain Company, LLC

Posted: 10/11/11

By: tomgrisafi

Corn will trade with a 60 cent limit range today.

The potential for even greater volatility comes following Tuesday's market spectacular where corn, soybean and wheat futures posted their biggest gains in more than a year on signs that a plunge in prices last month is increasing demand for supplies from the U.S.

According to reports from Bloomberg, Mexico, the biggest corn importer after Japan, bought 261,200 metric tons from U.S. exporters, the government said today. Soybeans inspected for export more than doubled to 23.4 million bushels in the week ended Oct. 6, with two-thirds destined for China, the U.S. Department of Agriculture said. Russia said today it may impose export duties on grain just three months after lifting a ban on shipments.

Grain futures that plunged in September on concern that Europe’s debt crisis would slow global growth led a jump today in the Standard & Poor’s GSCI Index of 24 raw materials. The commodity gauge reached the highest since Sept. 22 and extended a five-session rally that is the longest since August. Treasuries fell, pushing yields to a one-month high, and the S&P 500 equity index advanced for a second day.

“Prices fell low enough to increase world and domestic demand for U.S. grains,” Jacquie Voeks, a senior market adviser for Stewart Peterson Group in West Bend, Wisconsin, said in a telephone interview. “Prices we have now are not high enough to boost the amount of new acreage we need next year to meet the rising global demand for food.”

Corn futures for December delivery climbed the exchange limit of 40 cents, or 6.6 percent, to settle at $6.45 a bushel on the Chicago Board of Trade.

Source: Bloomberg

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