March 27 (Bloomberg) -- Corn futures closed at a seven- month high, approaching a bull market, after a government report showed increasing export demand for supplies from the U.S., the world’s top grower and shipper. Wheat gained, while soybeans fell.
Sales of corn were more than four times higher than a year earlier and 89 percent higher than a week ago, the U.S. Department of Agriculture said today. The grain is trading at a discount to wheat, improving demand prospects.
“Corn is cheaper than feed wheat and readily available from the U.S.,” Dave Marshall, a farm-marketing adviser for Toay Commodity Futures Group LLC in Nashville, Illinois, said in a telephone interview. “Every domestic consumer of corn is profitable, so there is a financial incentive to build inventories ahead of the growing season.”
Corn futures for delivery in May rose 1.5 percent to close at $4.92 a bushel at 1:15 p.m. on the Chicago Board of Trade, the highest settlement for a most-active contract since Aug. 26. The price has climbed 19 percent from a 40-month low of $4.12 on Jan. 9. A 20 percent gain denotes a bull market.
Sales booked for delivery before Sept. 1 are more than double the year-earlier pace, USDA data show. The average U.S. cash wheat price is at a premium of $2.2269 a bushel to cash corn, compared with a discount of 28 cents a year ago.
The USDA may say on March 31 that U.S. farmers intend to plant 93.014 million acres of corn this year, down 2.5 percent from a year earlier, a Bloomberg survey showed. Soybean planting may jump 6 percent to a record 81.162 million acres.
Soybean futures for May delivery fell 0.2 percent to $14.365 a bushel in Chicago. Prices climbed 2.2 percent in the prior three sessions on speculation that U.S. inventories on March 1 fell to the lowest in a decade.
Wheat futures for May delivery rose 2 percent to $7.105 a bushel in Chicago, halting a two-session slump.