SINGAPORE/PARIS: US wheat rose by 1.2 percent and corn gained 0.8 percent on Monday, following losses last week, buoyed by hopes that Greece can avoid a default after lawmakers passed an austerity bill to secure a bailout.
The dollar fell and European and Asian shares rose modestly as investors moved into riskier assets and away from the safe-haven currency, making US grain more attractive for overseas buyers.
"Last week we saw prices fall largely due to the economic concerns and USDA report, but today because of positive news from Greece, there is some support for the grain markets," said Lynette Tan, an analyst with Phillip Futures in Singapore.
The dollar index, which measures the strength of the greenback against a basket of currencies, fell 0.4 percent, making US dollar-priced commodities more attractive for overseas buyers.
Chicago Board of Trade March wheat rose 1.2 percent to $6.37-1/2 a bushel by 0333 GMT. March soy added 0.8 percent to $12.38-1/2 a bushel, and corn for March delivery gained 0.8 percent to $6.36-1/2 a bushel.
Euronext milling wheat rose slightly on Monday in thin volume, supported by the return of mild weather conditions after a cold spell last week raised concerns over possible damage to Western European grain plantings.
"This week will be decisive (to check the impact of the frost on plants)," one French trader said, adding that the humid weather conditions in France should allow the plants to reposition themselves correctly in the ground after frost lifted them.
Worries over frost damage in Eastern Europe remained high, however, because crops had already suffered from bad sowing conditions in the autumn.
Euronext March milling wheat was up 50 cents or 0.24 percent at 211.00 euros a tonne by 1123 GMT. New crop November wheat also edged 50 cents higher at 192 euros per tonne.
Prices were also higher in line with small gains at Chicago.
In parts of South America, hot and dry weather is curbing corn and soybean yields, while a cold snap in the US Plains is posing a threat of winterkill to the wheat crop, which could further support prices.
"We are also looking at the weather in US Plains for the wheat crop and South America for corn and soybeans," Tan said.
A cold snap in the US Plains is posing a threat of winterkill in some parts of the hard red winter wheat region, but a protective snow cover is in place in what may provide to be the coldest areas.
Some rain and snowstorms in the region over the past few months have replenished soil moisture and boosted prospects for this year's crop following severe drought in 2011.
In Argentina, corn planted early in the 2011/12 season was hit hard by weeks of drought at the turn of the year, but recent rains have refreshed late-seeded crops, the farm ministry said in a report on Friday.
The South American country is the world's second-biggest corn exporter after the United States, and the prolonged dry spell has dimmed prospects that it will be able to replenish global supplies to make up for a disappointing US crop.
Forecasters said minor-to-moderate stress lingered in about 20 percent of the soybean belt but that should ease in coming days. However, the potential for rain remained low over two weeks and yields are expected to decline.
Commodity funds sold an estimated net 8,000 Chicago Board of Trade corn futures contracts on Friday. They sold 2,000 wheat and bought 1,000 soybeans.
Grain prices fell last week as the US Agriculture Department's monthly supply and demand report lacked any bullish surprises that would have driven the market higher after investors built a risk premium into grain and oilseed prices.
The US corn stockpile is projected by USDA to shrink this summer to its smallest in 16 years, down 5 percent from the previous forecast to 801 million bushels. That was still slightly larger than traders had anticipated.
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