Grains rose on Monday as optimism about a resolution to the eurozone debt crisis helped weaken the dollar and spurred investors to buy risk assets such as agricultural commodities that had fallen to multi-month lows. Higher crude oil added to momentum for soyabeans and corn, which are used to produce biofuels, but wheat's gains lagged the pace after the dollar moved off the day's low.
"The market was heavily oversold," said Jason Roose, vice president of US Commodities in Iowa. "And we're at very importable (price) levels now. "We're a little more competitive and I think that's why we're seeing this rally today." Chicago Board of Trade corn for March delivery rose 8-1/2 cents, or 1.4 percent, to $5.98-1/2 per bushel, shaving earlier gains. March's gain was only its second in the past eight sessions. Actively traded March wheat pared earlier gains to eke out an increase of 4 cents, or 0.7 percent, to $5.93 a bushel, supported by light short-covering and outside markets.
"Wheat is a follower in this market it's battling through a transition period where we have an abundant supply of lower quality wheat," said Arlan Suderman, market analyst at Farm Futures magazine. Corn, linked to wheat through the animal feed market, has kept wheat propped up, but cheaper Black Sea region wheat has been a tough export competitor, Suderman said.
Open interest in Chicago wheat has fallen close to a fresh 10-month low. That indicates some investors are weary of the market's recent volatility and the unpredictable impact of the eurozone debt crisis, Roose said. January soyabeans rose 14-1/2 cents, or 1.3 percent, to $11.21 per bushel, gaining for the second time in eight sessions. Equities and crude oil rose as hopes grew that eurozone leaders would unveil fresh measures to resolve the 2-year-old debt crisis. Plummeting grain prices have already stoked expectations that China will accelerate buying of soyabeans and corn.
China was expected to import about 13 million tonnes of the oilseed in the first quarter, which is 18.5 percent higher than the year-ago period, the official China National Grain and Oils Information Center (www.grain.gov.cn) said on Friday. Crop weather in South America remains favourable, with no major concerns other than potential dryness in southern Brazil, said meteorologist John Dee of Global Weather Monitoring. But those areas should see rain this week, Dee said.