SINGAPOREUS: corn futures rose 2 percent on Friday as they continued to pull away from a three-month low, as a deal between Greece and international lenders added to support from bargain-hunting.
US wheat and soybeans were also higher as relief over the Greek agreement boosted risk appetite and pushed the dollar down, and as oil prices steadied after tumbling on news of the release of emergency fuel stocks.
"It's a rebound after sharp drop as people are buying on the dip with external factors such as the Greece deal supporting the grain markets," said Ker Chung Yang, analyst at Phillip Futures in Singapore.
Chicago Board of Trade July corn rose 1.84 percent to $6.93 a bushel by 1214 GMT and July wheat added 1.08 percent to $6.56. CBOT soybeans for July delivery rose 0.44 percent to $13.23.
On Thursday, corn futures sank to a three-month low, notching up their biggest two-day drop in 2-1/2 years, before staging a late recovery to close higher.
US wheat came off a one-year low on Thursday to also end in positive territory, and it saw more gains on Friday, helping European wheat in turn bounce off a three-month low.
Benchmark November milling wheat was up2.30 percent at 199.75 euros a tonne. It had fallen to a three-month low at 188.00 euros in the previous session before rebounding above a key floor at 186 euros.
Operators stressed wheat remained weak technically and due to pressure from improved crop weather and increased price competition as Black Sea returns to international tenders.
"Things haven't really changed there is a slight rebound in line with Chicago. It all looks very tentative," one European trader said.
The market was also starting to look ahead to next Thursday's quarterly US grain stocks report from the US Department of Agriculture, which could give fresh fundamental direction after the heavy sell-off in the past week.
Front-month wheat in Chicago is down 16 percent so far this month after being hammered for a fourth week in a row by a mix of bearish economic indicators and improved crop weather.
Corn has lost 7 percent in June after pulling back sharply from a record high at $7.99-3/4 on June 10.
Two weeks ago, US corn prices had soared nearly 150 percent from a year ago to a record high $7.99-3/4.
Analysts said a corn, seen as having the tightest supply outlook among leading grains, any further losses is likely to prompt feed millers to aggressively make purchases.
"There are tight old-crop supplies and the new-crop is not made yet," said Chung Yang.
"We are still awaited to see crop conditions report on Monday as the weather has been very erratic."
The northern US Corn Belt will stay wet keeping crop development slow and add more water to flooded rivers while the southern belt will turn hotter and drier, boosting plant growth, a forecaster said.
Welcome rain in Europe, Russia and Ukraine has pressured wheat prices this month as the moisture has improved the harvest outlook, especially in drought-hit parts of Western Europe.
Copyright Reuters, 2011
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