Slumping US grain futures rose on Monday on a technical bounce from a market viewed as oversold and as signs of progress in talks to resolve a budget crunch in the United States also lifted other commodity and equities markets.
The CRB Index, a commodity-price index, rose to its highest level in nearly a month after US lawmakers indicated compromises were possible in negotiations to avert $600 billion in tax increases and spending cuts due to start in January - the "fiscal cliff" that threatens to send the US economy back into recession.
"At least for today, everybody's feeling kind of optimistic about budgetary negotiations in Washington," said Dale Durchholz, analyst for AgriVisor. "It's one of those risk-on days." The grain markets were due for a rebound after soyabeans set a five-month low on Friday, erasing gains from the summer's devastating US drought, and wheat fell to a four-month low, traders said.
Soyabeans sank last week on an improved outlook for global supplies and on Monday were trading down 22 percent from an all-time high of $17.94-3/4 a bushel reached on September 4 as concerns about the drought peaked. January soyabeans were up 0.9 percent to $13.95-1/4 a bushel at the Chicago Board of Trade by 11:10 am CST (1710 GMT). December wheat added 0.9 percent to trade at $8.45-3/4 a bushel, while December corn advanced 1.6 percent to $7.38-1/2 a bushel.
Soya prices felt additional support from a temporary halt to regular state soya sales in China, which traders expect will lead to increased US sales to the world's top soya importer. Beijing is starting a stockpiling program for soyabeans to improve margins for soya plants and spur imports, according to the China National Grain and Oils Information Center, an official think tank.