Chicago wheat rose over 2 percent on Monday and corn added 1 percent as both rebounded from last week's lows as concerns about bad crop weather in the United States and Europe provided support. Soyabean futures also firmed, tracking strength in corn and crude oil as commodities recovered some way from their dramatic slump last week on improved risk appetite following better-than-expected US job numbers.
"We are looking at the impact of weather on European crop and the picture of US winter wheat doesn't look too good," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore. An analyst at a European bank added: "We are seeing a return to fundamentals in grains markets following the meltdown last week, with dry weather in parts of France and Germany which could damage crops returning to focus." "The weaker dollar is also generally supportive."
Chicago Board of Trade July wheat rose 2.14 percent to $7.75-3/4 a bushel by 1055 GMT in European trade on Monday as the market recovered from the lowest levels seen since mid-March reached in last week's selloff. Chicago July corn gained 1.02 percent to $6.93-1/2 a bushel, while soyabeans for July delivery rose 0.6 percent to $13.34-1/2 a bushel.
Last week, front-month corn fell 9.4 percent, its biggest weekly drop since October. Wheat futures fell 5.8 percent for the week and soyabeans fell 4.9 percent in the largest weekly drop in commodity prices since 2008. The wheat market was supported by a drought trimming US winter wheat prospects and unfavourable weather in Germany, France, China and Canada also pointing to possible tighter supplies, particularly of higher protein wheat.
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