CHICAGO (Dow Jones)--Corn prices rose Wednesday on China's growing appetite for the grain.

China has bought at least 15 cargoes of U.S. corn in the past month to replenish local stockpiles in a bid to damp high prices there, according to trading executives. Just last month, the U.S. Department of Agriculture confirmed that China had agreed to buy 115,000 metric tons for delivery in the 2009-10 marketing year.

The news about the Chinese buying have quelled skeptics, who have warned that China may be just looking to test the waters. If the deals are executed, this year could be the biggest for U.S. corn shipments to China, the world's second-largest consumer after the U.S. since at least 1998-99. Large U.S. imports were recorded in the mid-1990s, including 4 million metric tons in 1994-95, but demand tapered off as China became more self-sufficient in corn production.

The market surged in early trading Wednesday, but prices waned as the rally was met by a wave of selling by farmers eager to unload some of their inventory, traders said. Corn for July delivery, the most-active contract, hit a seven-week high in early trading. The market is down from all-time highs above $7.50 in early-July 2008.

July corn settled up 1 1/4 cents at $3.78 1/4 a bushel on the Chicago Board of Trade. Corn for May delivery settled up 2 cents at $3.71 3/4.

Traders and analysts said the China purchases are bullish mostly because they raise the prospect of even more buying by the huge commodity consumer.

"Whenever you get China involved, psychologically it's going to give you a boost," Shawn McCambridge, senior grains analyst with Prudential Bache, said.

The latest spate of Chinese buying hasn't yet been confirmed. But the shipments are to be spread out over several months, according to trading sources who spoke on the condition of anonymity because they aren't authorized to speak with the press.

Other than the 115,000 metric tons in sales the USDA confirmed two weeks ago, it has also listed 240,000 metric tons in sales to "unknown destinations," which traders have widely assumed are meant for China.

While the volume of corn in each cargo varies, assuming an average shipment of 55,000 metric tons, China's corn purchases from the U.S. may have already risen above 800,000 tons.

Ag Resource Co. said Wednesday that most traders with commercial firms see China's 2010 corn exports between 2 million and 4 million metric tons.

That won't be enough to seriously stress U.S. supplies, said Prudential Bache's McCambridge. He said 3 million metric tons would equate to a little more than 100 million bushels. He noted the USDA already increased its export projection by 50 million bushels on Tuesday, and that ending stocks are still ample at around 1.8 billion bushels.

China has emerged as a buyer because of soaring domestic prices fueled in part by a drought last year and a slow start to this year's planting season. This has made it cheaper to import corn to southern areas of the country rather than transport it by rail from northern areas.

McCambridge said that situation is likely temporary, and that China will continue to have bountiful supplies as long as crops in the northern region are solid this season.

But Thomas Dorr, president and CEO of the U.S. Grains Council, said the buying comes in the context of China's increased prosperity and increased appetite for protein, which will require more feed for its livestock and poultry.

The purchases, if confirmed, indicate "a more consistent, solid and trade-worthy relationship with the Chinese," he said.

-By Ian Berry, Dow Jones Newswires; 312-341-5778;