US wheat futures recover

US wheat futures rebounded 1.2 percent on Monday after a drop of more than 2 percent on Friday as traders bet that top importer Egypt would buy more wheat to quell civil unrest. Wheat prices slid on Friday as riots in Egypt prompted concerns about physical shipments.
Egyptian wheat-buying board GASC told Reuters it had supplies covered for 10 months, but analysts said rising food inflation and social unrest in several importing nations should ultimately lead to more demand for grains. "It's GASC's role to say it has enough stocks, and it is probably true. But that does not mean that they won't come back and buy more to cover the end of the campaign," a European trader said.
Egyptian President Hosni Mubarak appointed a new interior minister on Monday as part of a revamped cabinet designed to defuse the most serious challenge to his rule in three decades. "Most market players appear to be betting on an increase in food imports in Egypt, like in other countries in the region such as Algeria," Commerzbank said in a research note.
The crisis in Egypt follows a revolt that toppled the leader of Tunisia two weeks ago and a wave of popular anger sweeping across north Africa and the Middle East. Chicago Board of Trade wheat for March delivery rose 1.5 percent to $8.38 by 1301 GMT. March soyabeans were up 0.7 percent at $14.08 a bushel and March corn gained 1.01 percent to $6.50-? a bushel.
On the weather front, a big winter snowstorm is heading for the US Plains and promises much-needed moisture for dry hard red winter wheat fields. Poor crop prospects recently pushed wheat prices to 29-month highs. Soyabeans and corn futures advanced in step with benchmark oil prices and on concerns over tight world supplies amid a grain port strike in Argentina, the world's second-largest corn supplier and third-biggest soyabean exporter.
Benchmark Brent oil surged to a 28-month peak near $100 a barrel on Monday on concerns anti-government protests in Egypt could lead to instability across the Middle East and disrupt oil shipments through the Suez Canal. Corn and soyaoil are feedstocks for US biofuel production and often follow crude oil price trends.
"Prices in early trade this morning are higher across the board, and with overall fundamentals remaining positive, we would expect price dips to be temporary in nature," Barclays Capital said in a market note. In Argentina, a pay strike has stopped 20 ships from loading, threatening exports from one of the world's biggest food suppliers. The strike has paralysed soya-crushing plants and port terminals in the northern Rosario area. Analysts and traders said the Argentine strike may shift soyabean export business to the United States and prompt China to book more US business as a protection against disruption of shipments from Argentina.