Some Chinese corn importers are seeking to sell back undelivered shipments from U.S. suppliers to profit from an increase in prices since they placed their orders, said three people with direct knowledge of the matter.
The most-actively traded contract for corn has surged more than 50 percent since mid-June as concerns grew that a drought in the U.S. would hurt yield prospects. As a result, some buyers in China who ordered corn before the rally want to sell back their bookings at current prices in a trade process known as “wash-out,” said the people, who asked not to be identified as the transactions are private.
One feed mill in the southern province of Guangdong sold back a cargo to its buyer today, two of the people said.
Corn futures for December delivery climbed as much as 1.8 percent to $7.98 a bushel on the Chicago Board of Trade by 6:39 p.m. Beijing time.
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