US soyabeans and corn rallied on Monday, recouping losses from last week, as hopes that Greece can avoid a default after lawmakers passed an austerity bill to secure a bailout lifted the grains complex as well as crude oil. Wall Street traded modestly higher and the dollar fell as investors moved into riskier assets and away from the safe-haven currency, making US grain more attractive for overseas buyers.
Soyabeans led the early gains at the Chicago Board of Trade, with the front contract rising to a near four-month high on concerns about hot and dry weather in southern Brazil, where the soya crop is still developing. "Certainly the news out of Greece was positive, and the dryness out of Rio Grande do Sul - I think we are trading the same bullish forecast we got for southern Brazil that we had on Friday," said Dan Cekander, analyst with Newedge USA.
"You're doing damage (to the soya crop) this week. It just solidifies ideas that USDA's recent estimate of 72 million tonnes is significantly overstating Brazil's soya production," he added. CBOT March soyabeans rose to $12.49-3/4 per bushel, the highest spot price since October 19 but pared gains on profit-taking after the contract failed to break psychological resistance at $12.50. Traders were digesting the US Department of Agriculture's annual baseline projections for US crops, which projected corn seedings for 2012 at 94 million acres (38 million hectares), the most since World War Two, and 2012 soyabean plantings at 74.0 million acres.
USDA's corn figure came in close to a Reuters poll of 24 analysts last week that projected US 2012 corn plantings at 94.2 million acres. But the poll projected soyabean plantings at 75.3 million acres, 1.3 million above USDA's baseline figure. "The corn number is not too far off, but some people have questions about the soyabean numbers (being) a little smaller," said Rich Nelson of Allendale Inc.
As of 12:42 pm CST (1842 GMT), CBOT March soyabeans were up 10 cents at $12.39 per bushel. March corn was up 4-1/2 cents at $6.36-1/4 per bushel and March wheat was up 2-3/4 cents at $6.32-3/4 a bushel. CBOT wheat trailed the other markets, with early gains eroding as USDA's forecast last week for record-large US world wheat ending stocks for 2011/12 continued to weigh on prices.
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