US soyabean futures jumped more than 2 percent on Monday, extending gains to a one-week high as strong Chinese demand and hopes of economic recovery triggered a broad rally in commodity markets. Corn rose around 1 percent on spill-over strength from soyabeans, while gains in wheat were capped as a global supply glut weighed on the market.
Asian stocks jumped more than 2 percent on Monday and lifted world shares to a 10-month high after upbeat US housing data and optimistic comments from Federal Reserve Chairman Ben Bernanke spurred buying of riskier assets.
Last week, the US Department of Agriculture confirmed that China, the world's top soya buyer, made big purchases of soyabeans - 896,000 tonnes in all, or some 15 ocean cargoes for delivery from September onward. In the past, China has bought a lot of soya from Brazil and Argentina, but an unprecedented drought this year in South America sharply trimmed soya output.
The front-month September soyabean contract rose 2.5 percent to $10.49 a bushel by 0348 GMT and September corn rose 1 percent to $3.25 a bushel. September wheat was up 0.8 percent at $4.64 a bushel by 0348 GMT. "The main thing is that you have got the US dollar selling off and when that happens you have funds buying commodities, especially soyabeans which have fundamentals," said Ben Barber, a commodities broker at Bell Commodities in Melbourne.
"You still have very strong demand for soyabeans and people are starting to get some jitters about cool weather, it's all creating a perfect storm." US corn and soyabean crops have enjoyed almost perfect weather this summer, but cooler weather moving into the Midwest has turned investors' attention to the possibility of frost threatening crop development, mainly soyabeans, which are in the critical pod-filling stage. "Dry conditions or a few widely scattered showers and thundershowers through central areas on Wednesday and Thursday," DTN Meteorlogix said in its forecast for the Midwest soyabean crop. "Temperatures near-normal in north, above normal in south on Wednesday. Near-normal in north, near to above normal in south on Thursday and Friday."
China's Dalian soyabean futures, Asia's most-active, rose around 2 percent following CBOT gains. A drought in China's north-east, the main soya producing region, is very serious but a late harvest and rainfall in the next month should eliminate any risk of crop failure, Vice Minister for Agriculture Niu Dun said on Monday.
The strength in the soyabean market came even as the Pro Farmer crop tour estimated big corn and soyabean production in the United States. Volunteer crop scouts surveyed more than 2,000 fields in seven key producing states. Oil, which often lends support to grains for their use in making biofuels, rose above $74 a barrel, trading near a 10-month high, amid increased optimism energy demand will rebound as the US economy heads for a recovery.
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