FX.co ★ Corn review for May 25, 2011

Futures on corn closed with a gain on Wednesday amid growing wheat prices. Concerns over suspense in field work also supported the market.
By the end of CBOT trading July futures on corn closed with an increase of 9 cent (1.2%), 7.42 ¼ dollars per bushel.
Heavy raining in US Middle West and Northern part of the Great Plains caused the prices to spike on Wednesday as concerns over the quality of corn harvest exacerbated. Bad weather is expected to bring our suspense in seeding.
In particular, in North Dakota and Minnesota freezings are expected. They may well have negative impact on the new crops.
Market participants expect farmers to provide an area of several acres for soybean which is more resistant to unfavourable weather. It will intensify concerns over corn supplies. This year farmers need to have good harvest to replenish their reserves which is at 15-year low due to strong export demand. Earlier last month futures grew up to record highs amid stable demand of cattle farmers and ethanol producers which were rather worried about declining supplies. At present all-time highs are reducing.
Private analytical companies forecast corn seeding to rise by 5-9% only by the end of the week owing to heavy rains in the USA.
However, meteorological agencies have been telling about dry warm weather to set up next week which is to facilitate field work.
The data coming from China can further support the market. The stable drought in the country has already driven corn prices up. Additionally, corn reserves in China are at all-time lows.
The data provided by the US Agriculture Department on Monday confirmed talks about China getting back on the market. According to this data, China bought 4.6 mln. bushels of American corn on May 12-19.