US wheat rebounds after hitting three-month low

US wheat rebounded on Friday after a hitting three-month low earlier and corn picked up after nearing a one-month low, but concerns over Greece's debt crisis continued to weigh on agricultural markets. Soy, which neared its lowest in a month, also followed the trend. Chicago Board of Trade July wheat rose 1 percent to 6.680 a bushel by 1130 GMT and soybeans for July delivery gained 6 cents to $13.56 a bushel.
July corn rose 1.6 percent to $7.13 a bushel, while harvest month December delivery corn rose 1.3 percent to $6.61 percent. In early trade on Friday, corn had been on track for an 11 percent decline this week and wheat had dropped 10 percent since last Friday.
Kona Haque of Macquarie Group said lower prices earlier in the day provided an opportunity for short covering, which fuelled demand later. "The corn is extremely tight any dip such as these will be seen as strong buying opportunity," she said. There was additional pressure on the grain markets from favourable crop weather in the Midwest and the harvest of the winter wheat crop in the United States.
"We are seeing follow-through liquidation in wheat as there is talk about the collapse of the euro that makes European wheat more competitive," said Brett Cooper, senior manager of markets at FCStone Australia. "There is harvest pressure coming on in the United States as well." European wheat futures were nearly 3 percent down on Friday nearing two-months low. Benchmark milling wheat on the Euronext exchange traded 2.5 euros down at 213.50 euros a tonne as the Greek debt crisis and uncertainty about 2011 yields weighed on grains market.
But Germany's Commerz Bank said in its daily report that the price downturn was not likely to last long as lower supply forecasts, both for EU and United States, due to poor weather conditions will weigh on the market. "The tight supply situation suggests that European wheat prices will rise again," it said. The euro was steadier in Asia on Friday after a roller-coaster ride in the past 24 hours that saw it slump to a record low on the Swiss franc, before staging a rebound as the market reacted to headlines about Greece's debt crisis.
There was reaction on Europe's crisis from China, where the foreign ministry said it was vitally important that Europe overcomes its debt crisis. Another bearish blow came shortly after the market closed on Thursday, with the US Senate voting overwhelmingly to eliminate billions of dollars in support for the ethanol industry, which uses about 40 percent of the US corn crop. The Senate in a 73-27 vote approved an amendment to end the 45 cent-a-gallon subsidy the government gives refiners and the 54 cent-per-gallon tariff on imported ethanol.