Chicago Board of Trade US wheat futures rose as much as 2.8 percent on Monday, extending a reversal of an oversold seven-week decline and supported by talk of a rebuilding of global stockpiles, traders said. July wheat futures had settled back to a gain of around 0.8 percent to $8.15-a bushel, rebounding from a fall of more than 30 percent from all-time highs in February.
A return of fund buying, signs that food-conscious governments were keen to rebuild wheat stocks, and concern about dry weather in eastern Australia, all added to wheat's rise, traders said. But US rice futures fell as sharply as wheat rose on Monday, ahead of a tender for 675,000 tonnes in the Philippines, the world's biggest importer of rice.
US rough rice futures on Monday reversed on Friday's gains, with the July contract falling by over 1 percent to $20.70 a hundredweight. The contract was down 0.8 percent at $20.78 a hundredweight.
Rice prices are settling back from recent record highs triggered by global supply shortages and strong demand. International markets have been looking to Monday's tender in Manila as a key indicator on whether surging rice prices have peaked. Fears mounted on Monday that only one firm might bid in the tender, because of a requirement for state backing, even though nine trading houses have expressed interest in bidding.
Meanwhile, the return of investment funds to global commodity markets as recession fears eased was expected to boost demand for wheat as profit-takers switched from corn, traders said.
The market shrugged off bearish wheat production estimates from consulting firm Informa Economics of looming high US production. Low world wheat stocks after small crops last season was still focusing attention on the prospect of governments rebuilding wheat stocks, they said.
India's biggest official food procurement agency Food Corp said on Friday that it had been building stocks and would continue to do so. As concerns over food shortages mount around the world, India, which has imported wheat in the past two years, has banned export of the grain and severely curtailed sales of rice. Attention may also be turning to a need for rain in eastern Australia to support planting, said Pat Cogswell of commodities broker MF Global.
July corn was down 0.4 percent at $6.11. Soyabeans recouped losses of over 1 percent to trade down 0.3 percent at $12.99-a bushel, reversing gains in Chicago on Friday. Argentine farmers have said they would limit sales of agricultural goods in a renewed protest against a hike in tax on soya exports.
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