Chicago soyabean futures rose on Friday with help from crude oil to extend their strong rally this week, but trading was hesitant ahead of closely watched US jobs data. Wheat edged higher and corn inched down as markets were cautious in the run-up to the US jobs report for March.
Chicago Board of Trade soyabeans for May delivery rose 0.67 percent to $9.83-1/2 per bushel by 1109 GMT, to stay close to a nearly two month high set on Thursday. Corn for May delivery inched down 0.19 percent to $4.01-3/4 per bushel after hitting a two-month high on Thursday, while May wheat added 0.64 percent to $5.54 to stay at its highest levels in more than a week.
On Thursday soyabean futures jumped more than 2 percent, wheat rallied nearly 5 percent and corn rose over 1 percent as big money swept into the grain markets, encouraged by a falling dollar and a third straight session of gains on Wall Street as investors welcomed measures agreed by the G20 leaders. "If it hadn't been for the currency I don't think you would have seen such a performance," said Tim Glass, global head of commodities trading at National Australia Bank.
A weaker dollar favours US commodities by making them cheaper on the world market. The dollar recovered some ground on Friday, pressuring Chicago prices, as investors played safe before the afternoon's non-farm payrolls data due at 1230 GMT. Grain markets were underpinned by firmer crude oil, which benefited from continued positive reaction to the Group of 20 summit in London.
Leaders from the G20 group of the world's biggest economies pledged to provide $1.1 trillion in additional funds to support the global financial and trade system, and predicted the measures would raise world output by 4 percent by the end of next year. In Europe, milling wheat futures edged higher in line with Chicago and supported by continued reluctance to sell on the part of producers. The May contract added 0.55 percent to 137.00 euros a tonne.
European operators said the market was looking to see if CBOT wheat managed to stay above the key $5.50 threshold. Euronext prices remained capped by bearish sentiment about large supplies in Europe as the season's end approaches. "The heavy fundamentals haven't gone away," one trader said. The euro-dollar exchange rate was still unfavourable to European grain, although the European Union announced a hefty 477,000 tonnes of wheat export licences for this week.
PLANTINGS COMING INTO FOCUS Volumes in Friday's electronic CBOT session were light as traders took to the sidelines ahead of the release of the US March employment report, Glass said. Toby Hassall, an analyst at Commodity Warrants Australia, said outside markets continued to dominate trading but traders were also keeping an eye on weather in the United States as farmers prepare for spring plantings.
"Those macro-forces remain a big driver of the grains markets but as we get closer to the planting window for corn and soya the weather conditions in the US will have quite an increasing effect as well," said Hassall. A lower than expected US Department of Agriculture estimate for 2009 soyabean plantings had triggered a rally for soya futures on Tuesday.
In France, Europe's leading grain producer, traders said there were background concerns about below-normal water levels in the north of the country and late development of crops of up to two weeks.
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