Corn, wheat rebound on economic hopes, weak dollar

CHICAGO: US grain futures rebounded on Wednesday, with corn rising 2 percent as European finance ministers agreed to safeguard their banks, reducing the chances of a global meltdown sparked by Europe's debt crisis.

But traders were expecting the gains in corn and soybeans to be limited as the harvest in the Midwest grain belt advanced this week under favorable conditions.

"We're getting a technical bounce. It's a commodity friendly, risk-on day" said Don Roose, analyst at US Commodities in West Des Moines, Iowa.

Corn for December delivery was up 12 cents at $5.99-3/4 per bushel, a 2 percent bounce after falling to a 9-1/2 month low at the Chicago Board of Trade.

Corn futures drew support from a US Grains Council announcement that China could import 5 million to 10 million tonnes of corn. But futures hit resistance at $6 per bushel.

China is celebrating its annual week-long national holiday and "there is a fear that when they come back, they could be a buyer," Roose said. "We're seeing some short-covering."

CBOT November soybeans were 2-1/2 cents higher at $11.62-1/4 per bushel, recovering from a one-year low hit on Tuesday. The contract hit a session high of $11.74, then pared gains due to nearly perfect weather for the US soy harvest.

CBOT December wheat surged 2 percent, or 12-1/4 cents, to $6.16 per bushel, rebounding from its recent three-month low.

Traders were awaiting release of the latest US crop estimates by Informa Economics, expected at 10:30 a.m. CST (1630 GMT).

The gains in grains followed a sharp rise in crude oil, which climbed more than 3 percent early on tighter inventories and news that euro zone bankers were likely to provide aid to debt-ridden Greece.

Copyright Reuters, 2011