Corn prices jumped amid worries that upcoming estimates from the U.S. will show that grain supplies remain tight.
The Department of Agriculture is expected to say Thursday that U.S. corn inventories were 23% lower as of June 1 compared with this time last year. Two separate reports are set to be released, with estimates for grain plantings as well as stockpiles.
Grain crops around the world have struggled with patchy rains and the kind of weather that results in poor yields, deepening worries about global food prices.
The corn markets, in particular, are being watched closely because inventories are the tightest among major crops and a bumper harvest is needed just to keep pace with demand.
Corn futures had rebounded 12% over the past five trading sessions after getting caught up in a broad commodity selloff spurred by concerns about Europe's debt woes.
Lower grains prices weren't sustainable even though investors see commodities generally as risky and vulnerable to concerns about the global financial system, said Jason Britt, president of brokerage Central States Commodities.
"Just because Greece is having a hiccup, it doesn't grow any more corn out there," Mr. Britt said.
Once Greece's parliament passed austerity measures on Wednesday, traders shifted focus back to tight corn supplies.
Corn for July delivery was recently 1.8% higher at $6.9525 on the Chicago Board of Trade after surging as high as 4.5% at the open.
The rally gained traction after the USDA on Monday said that conditions of the U.S. corn crop were deteriorating.
Fresh indications that China was in the market for corn also supported prices.
According to traders, shipping executives and cargo surveyors, China has bought at least 1.7 million metric tons of U.S. corn in the last four months, a figure that includes 700,000 tons contracted in recent weeks.
China became a net importer of corn in 2010 for the first time in 15 years, and its purchases are being watched closely, particularly as supplies in the U.S. run low. The U.S. is the largest exporter and grower of corn.
Analysts expect the USDA to peg 2011 corn plantings at 90.776 million acres. That is in line with the agency's early June estimates that put land sowed at 90.7 million acres, but below the USDA's original estimate in March of 92.178 million acres.
The data will likely reinforce the view that corn plantings have fallen short of expectations. Also, the USDA is expected to report Thursday that estimated corn inventories as of June 1 were 3.324 billion bushels, down 23% from a year ago.
"We need every bushel, every acre, and it's not happening," Mr. Britt said.
Still, analysts at Jefferies say they don't see corn reaching $8 a bushel, a level nearly breached in early June.
"We acknowledge the near-record low inventory levels for corn, but believe a softening global demand outlook when combined with recent favorable U.S. weather trends, improving prospects for competing crops (European wheat) and falling oil prices will likely prevent the return of $8 corn," they wrote.
The Department of Agriculture is expected to say Thursday that U.S. corn inventories were 23% lower as of June 1 compared with this time last year. Two separate reports are set to be released, with estimates for grain plantings as well as stockpiles.
Grain crops around the world have struggled with patchy rains and the kind of weather that results in poor yields, deepening worries about global food prices.
The corn markets, in particular, are being watched closely because inventories are the tightest among major crops and a bumper harvest is needed just to keep pace with demand.
Corn futures had rebounded 12% over the past five trading sessions after getting caught up in a broad commodity selloff spurred by concerns about Europe's debt woes.
Lower grains prices weren't sustainable even though investors see commodities generally as risky and vulnerable to concerns about the global financial system, said Jason Britt, president of brokerage Central States Commodities.
"Just because Greece is having a hiccup, it doesn't grow any more corn out there," Mr. Britt said.
Corn for July delivery was recently 1.8% higher at $6.9525 on the Chicago Board of Trade after surging as high as 4.5% at the open.
The rally gained traction after the USDA on Monday said that conditions of the U.S. corn crop were deteriorating.
Fresh indications that China was in the market for corn also supported prices.
According to traders, shipping executives and cargo surveyors, China has bought at least 1.7 million metric tons of U.S. corn in the last four months, a figure that includes 700,000 tons contracted in recent weeks.
China became a net importer of corn in 2010 for the first time in 15 years, and its purchases are being watched closely, particularly as supplies in the U.S. run low. The U.S. is the largest exporter and grower of corn.
Analysts expect the USDA to peg 2011 corn plantings at 90.776 million acres. That is in line with the agency's early June estimates that put land sowed at 90.7 million acres, but below the USDA's original estimate in March of 92.178 million acres.
The data will likely reinforce the view that corn plantings have fallen short of expectations. Also, the USDA is expected to report Thursday that estimated corn inventories as of June 1 were 3.324 billion bushels, down 23% from a year ago.
"We need every bushel, every acre, and it's not happening," Mr. Britt said.
Still, analysts at Jefferies say they don't see corn reaching $8 a bushel, a level nearly breached in early June.
"We acknowledge the near-record low inventory levels for corn, but believe a softening global demand outlook when combined with recent favorable U.S. weather trends, improving prospects for competing crops (European wheat) and falling oil prices will likely prevent the return of $8 corn," they wrote.
