CHICAGO: Chicago Board of Trade corn and soybean futures weakened on Monday but recovered from lows put in early in the session as a wave of bargain buying hit the beaten-down grains markets, traders said.
Wheat prices edged higher after their weak open despite a surplus of world stocks and poor prospects for US supplies on the export market.
"We essentially held the lows from Friday and you have to wonder if that is starting to tell us that the most bearish news is already into the market," said Chad Henderson, analyst with Prime Agriculture.
The strength in wheat came despite a bearish fundamental picture and bucked an overall downward trend in commodities that stemmed from worries about the European Union's proposed solution to its debt crisis.
The US dollar firmed and stock markets dived as investors judged that last week's pact to bind EU economies closer together would fail to quell its financial crisis.
"The EU deal not up to snuff is the big news this morning," brokerage Intl FCStone said in a research note to clients. "Thus the dollar is higher and commodities as a whole are lower."
At 10:54 a.m. CST (1654 GMT), Chicago Board of Trade January soybean futures were down 1 cent at $11.06 a bushel. Prices hit a low of $10.95 earlier in the session, their lowest level since Oct. 8, 2010.
CBOT March corn dropped 1 cent to $5.93-1/4 a bushel. The front-month December contract, which expires this week, gained 2-1/2 cents to $5.88 a bushel.
CBOT January soft red winter wheat rose 2-3/4 cents to $5.98-3/4 a bushel. Expiring December wheat rose 5 cents to $5.78-1/2.
Twenty-six of the 27 EU leaders on Friday agreed to pursue stricter budget rules for the single currency area and also to have euro zone states and others provide up to 200 billion euros in bilateral loans to the International Monetary Fund (IMF) to help tackle the crisis.
The US Agriculture Department unexpectedly raised its estimate of corn supplies on Friday and boosted its stocks forecast for soybeans and wheat more than expected.
Poor export demand for US commodities keyed the bigger-than-expected stocks forecasts as high prices for US grains have caused overseas buyers to look elsewhere to fill their supply needs.
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