SINGAPORE: US grains were mostly higher on Wednesday after recent declines in prices spurred bargain hunting, although trading was cautious ahead of a EU summit later this week, when European leaders could take bold measures to end a crippling debt crisis.
Wheat could find support from a deteriorating crop in Ukraine, which may force the country to import the grain for the first time since 2004, while any signs of bad weather in South America would be bullish for soy and corn.
March Chicago Board of Trade corn futures gained 0.34 percent to $5.98-1/2 a bushel by 0326 GMT, extending Tuesday's gains. Front-month corn bounced from a 1-year low struck in the previous session.
"The market continues to be influenced by the macro economic concerns out of Europe. The corn market has also been heavy over the past couple of weeks as a result of increased supplies," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.
"What we are looking at is potential bullish influences over the next couple of months. In corn and soybean markets, we know, particularly in the case of corn, that US supplies do remain very tight and the focus this week is going to be on the USDA."
The US Agriculture Department is expected to lower its forecast of US corn stocks slightly due to rising feed use and a lackluster harvest while raising soy supplies by nearly 10 percent because of poor export demand, according to analysts surveyed by Reuters.
The closely watched USDA report is due out on Friday, CBOT March wheat hardy changed at $6.12-1/2 per bushel, with gains likely to be limited by increased wheat production in Canada, a record wheat crop in Australia, and more beneficial moisture moving across the US winter wheat belt.
January soybeans were trading up 0.20 percent at $11.31-3/4.
The contract was still within sight of a 13-month low hit late last month, but it may sustain the rebound if dry conditions persisted in soybean and corn growing areas in Brazil and Argentina ahead of the harvest in early 2012.
"We have a certain reliance on big South American crops coming to fruition in a year ahead, so any bout of adverse weather out of South America may support the oilseed and corn complexes," said Mathews.
Grains, like other commodities, have been weighed down by fears that a global economic slowdown triggered by the euro zone debt crisis could slash demand.
European Union leaders are expected to discuss boosting the firepower of the bailout fund on Thursday and Friday. Media reports cited senior officials saying that may include running two separate rescue facilities.
Less than 24 hours after Standard & Poor's placed 15 euro zone countries, including Germany and France, on credit watch negative, the rating agency threatened to cut the credit rating of the region's financial rescue fund.
Asian shares and the euro gained on Wednesday on hopes that the threat of mass credit rating downgrades will pressure European leaders to come up with a convincing framework for resolving the euro zone debt crisis at a crucial summit later this week.
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