(Bloomberg) -- Corn prices climbed above $6 a bushel to the loftiest level in almost eight years after the U.S. said it expects China to buy an all-time high amount of the grain off global markets.A shortage of supplies and a need to replenish hog herds after a major outbreak of deadly African swine fever will continue to fuel China’s appetite for corn imports, with the total for the current season seen at 28 million metric tons, the U.S. Department of Agriculture’s Beijing office said on Wednesday. That would be the most on record based on Bloomberg data going back six decades.The U.S. also predicts China, the top pork producer, will slash global corn purchases next year down to 15 million tons as it attempts to reduce reliance on foreign grains. Despite the sharp cut, that would still be the second-highest amount on record.“It’s a conservative figure” that will likely “be walked up in the coming months,” Rich Nelson, chief strategist at Illinois brokerage Allendale Inc. said in an interview.The forecasts imply further demand for already tight U.S. corn supplies, especially given concern about the condition of growing corn crops in Brazil. The majority of additional China purchases would probably be U.S.-based, Nelson said.China is expected to rely more on rice and wheat stocks in the next season due to the high price of corn. Still, demand for the grain isn’t expected to change until late 2021 or 2022, USDA officials in Beijing said in a statement.Corn futures on the Chicago Board of Trade climbed as much as 2.84% on Wednesday to $6.0875 a bushel, the highest since May 2013. Prices have nearly doubled in the last year as China scooped up massive amounts of the grain to replenish pig herds that were decimated by the deadly African swine fever.Fresh outbreaks of the deadly virus have emerged, triggering concern that China’s demand for feed imports may wane and cool the biggest crop futures rally in almost a decade.In other markets, soybeans rose as much as 1.5% to $14.795, the highest in nearly seven years.Benchmark wheat futures gained as much as 2.8% to $6.80 a bushel, the priciest in nearly two months as cold weather in the U.S. Midwest threatens damage.Sugar and cotton advanced, still supported by dry conditions in cane crops for top shipper Brazil, and in West Texas, the biggest grower of the fiber in the U.S.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
One of the world’s leading commodity traders, Louis-Dreyfus Company (LDC), has opened up to outside ownership for the first time in almost 170 years. The trader has sold a 45pc stake to ADQ, the Abu Dhabi state-owned holding company and also agreed a long-term supply agreement for the UAE. Owner Margarita Louis-Dreyfus, who also chairs LDC’s supervisory board, said the partnership marked a “milestone" in the firm's strategy. She has been seeking new investment after tightening her control in December 2018 when she bought out family members, borrowing about $1bn (£755m) from Credit Suisse to do so, pledged against her stake. Micheal Gelchie, LDC chief executive, said the firm and ADQ had a “shared ambition” to invest in innovation and technology that could “transform food and agricultural production”. LDC is one of the ABCD quartet of leading commodity traders, alongside Archer Daniels Midland, Bunge and Cargill. Founded as a grain trader in 1851 by Leopold Louis-Dreyfus, it produces, stores and ships about 80m tonnes of cotton, rice, sugar, grain and other agricultural products a year, with 2019 sales of $33.6bn and profit of $230m. Leopold’s great grandson, Robert Louis-Dreyfus, took over in 2006, three years before his death from leukaemia, when he put his wife Margarita in charge of the trust that held his 61pc stake. Commodities traders have been trying to diversify in recent years amid rising competition and trade wars. LDC has invested in partnerships with Leong Hup International, the poultry business based in Malaysia, and Luckin Coffee, the Chinese coffee chain. The terms of its deal with ADQ were not disclosed. LDC said at least $800m from the sale would be invested to support its long-term plans. H.E. Mohamed Hassan Alsuwaidi, chief executive of ADQ, said: "We share LDC’s vision for future growth of the business, and look forward to partnering with LDC’s existing shareholders and management team to capitalize on the sector’s emerging opportunities."
The Commitments of Traders report covering positions held and changes made by money managers in the week to June 2 found that speculators only made relatively small changes. Buying of WTI crude oil, gas oil, copper and cotton were off-set by selling of gold, soymeal, corn and coffee.