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Corn hits 2-week high on China demand, soybeans rise as rains disrupt Brazil harvest

01/27/2021 | 12:11am

* Corn hits highest since Jan. 13, up for third session

* Soybeans up for 3rd day on Brazil soy harvest worries

* Wheat advances on Russia's higher export tax plan

HANOI, Jan 27 (Reuters) - Chicago corn futures rose on Wednesday to a two-week high as China's purchase of U.S. supplies of the grain hit the highest level since July, while rains disrupting harvest in Brazil lent soybeans some support.

The Chicago Board of Trade (CBOT) most-active corn contract climbed as much as 1.4% to $5.39-1/2 a bushel, its highest since Jan. 13, and was on track to post a third straight session of gain.

"The near-term underlying bullish sentiment is still very much in place. We still have two to three months at least before we have confirmation that the new crop of global grain or oilseed will be adequate," said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities.

"Until then, the market is likely to continue upwards, with China demand as the key driver... unless China ends up having a real issue with the African swine fever."

The U.S. Department of Agriculture announced on Tuesday the biggest corn sale since July of 1.36 million tonnes to China, the world's second-largest consumer of the grain behind Japan.

New strains of the African swine fever identified in Chinese pig farms, though not deadly to the animals, have still caused a reduction in healthy newborn piglets, potentially threatening demand for animal feed in the world's largest pork producer.

Soybean prices rose for a third straight session and hit a level unseen since Jan. 21 at $13.85 a bushel, with worries about the Brazilian soy harvest underpinning the market.

Rains disrupted harvest in Brazilian soybean-growing areas, slowing down field work in the world's largest soy producer and potentially delaying planting of the country's second corn crop.

Wheat was up 0.5% at $6.68-1/4 a bushel by 0430 GMT, after hitting its highest since Jan. 21 of $6.70-3/4 a bushel earlier in the session, on plans of higher export tax by major producer Russia.

Russia, one of the world's largest wheat exporters, said on Tuesday it had formally approved a proposal to impose a higher export tax on wheat from March 1 in another push to curb a rise in domestic food prices triggered by the COVID-19 crisis. (Reporting by Mai Nguyen; Editing by Subhranshu Sahu)

© Reuters 2021
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