US corn and soyabeans rose on Wednesday as recent declines spurred bargain hunting, while cautious optimism ahead of a EU summit where policymakers are expected to find a way to resolve the region's debt crisis also supported sentiment. Wheat, which reversed early gains, could find support from a deteriorating crop in Ukraine that 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 soya and corn.
March Chicago Board of Trade corn futures gained 0.21 percent to $5.97-3/4 a bushel by 0615 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.
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 soya 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 shed early gains and fell 0.41 percent to $6.10-1/2 a bushel, weighed by increased wheat production in Canada, a record wheat crop in Australia, and more beneficial moisture moving across the US winter wheat belt. January soyabeans were trading up 0.24 percent at $11.32-1/4.
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 soyabean 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.
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