CHICAGO: US grains futures rallied on Tuesday, bucking the trend in commodities, with soybeans gaining for a second straight day on talk of fresh purchases by China after prices fell to a one-year earlier this month.
Wheat gained 2.9 percent and corn rose 2.2 percent as investors tidied up their positions ahead of the US Agriculture Department's monthly world supply and demand report on Wednesday.
Grains were higher on a day when oil was lower on worries over Europe's debt crisis, along with gold and copper.
"The market got too oversold and now we are getting a technical bounce into a report," said Bob Utterback of Utterback Marketing Services, a brokerage for farmers. "We have some bottom pickers trying to buy, expecting a bullish reaction to the report tomorrow."
The talk on the trading floor that sent Chicago Board of Trade soybeans to an 11-day high was that China may have bought six to eight cargoes of soybeans since Friday, mostly from the United States.
Corn, soybeans and wheat all benefited from bargain buying as investors were dipping their toes back in the commodity markets after prices slid throughout September and early October.
"A part of the action has to do with a correction because the slide in September was quite aggressive and it's a bit of a risk appetite in the market," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore. "Big importers would like to come into the market at these levels to take advantage of relatively cheaper prices."
At 10:17 a.m. CDT (1517 GMT), CBOT November soybeans were up 25 cents at $12.02-1/2 a bushel. CBOT December corn was up 13 cents at $6.18 a bushel and CBOT December wheat was up 17-3/4 cents at $6.29-1/4 a bushel.
Volumes were light with traders in a wait-and-see mode ahead of the release of the USDA report.
Analysts, on average, were expecting the USDA to lower its estimate of this year's crop by 1 percent from last month's forecast due to a drop in harvested acreage. Soybean stocks were seen rising 11 percent from the September forecast due to high prices lowering demand.
Planting has gained early traction across the grain belt in Brazil, the world's No. 2 soybean grower, after weekend rains marked the end of the dry season, crop analysts said.
Copyright Reuters, 2011
Comments
Comments are closed for this article.