NEW DELHI/MILAN: US wheat, corn and soy rose on Tuesday after the previous session's losses, joining gains in other commodities and shares encouraged by hopes the euro zone debt crisis would be reined in, while cold spell worries gave an additional boost to European wheat.
The euro, shares and commodities all gained on Tuesday inspired by hopes for a Greek debt deal this week and after European leaders backed a pact that is hoped will tackle the underlying causes of the region's debt crisis.
Chicago Board of Trade March wheat rose 1.67 percent to $6.55-1/2 a bushel by 1241 GMT. Corn for March delivery also gained 1.07 percent to $6.38-1/2 a bushel.
March soy edged 0.38 percent higher to $11.89-3/4 a bushel, after finishing down almost 3 percent at $11.85-1/4 cents per bushel on Monday.
"There has been some temporary gain as a result of Monday's sharp fall in Chicago," said Jonathan Barratt, chief executive of Barratt Bulletin, Sydney-based commodity research firm, adding he expected some pull back in prices on concerns about Europe's debt crisis spilling over to emerging markets.
Barratt said wheat could soon drop to $6.25 a bushel, corn to $6.20 per bushel and soy to $11.50 a bushel, adding that the recent rains in the parched fields of South America could put some downward pressure on corn and soy.
Traders said a drop in the dollar which makes dollar-denominated commodities more competitive has also helped gains in US wheat, corn and soy stay firm.
EYES ON WEATHER
In Europe, Euro next milling wheat futures rose more than two percent helped by concerns that cold weather in Western and eastern Europe may hurt crops, traders said.
Front-month March was 2.15 percent or 4.50 euros higher by 1242 GMT at 213.50 euros per tonne after hitting a high of 214.50 euros earlier.
"The cold snap that is going to hit us is scaring many people. If you look at the temperatures expected at -12, -13 degrees, it can do some damage, taking into account that plants were a little in advance," a Euro next trader said.
French weather forecasters on Tuesday predict morning temperatures would range from -5 to -9 degrees Celsius from Thursday, falling as low as -13 degrees in south eastern France by Friday. Plants are particularly vulnerable at this stage after mild weather has triggered growth earlier than usual.
Traders also mentioned concerns of cold temperatures in the Black Sea region, notably in Ukraine which is experiencing its coldest winter in six years. Temperatures in the former Soviet country do not normally sink below minus 15C.
In Latin America, dry weather has been stressing soybean and corn crops in Argentina and southern Brazil but rains began falling over the past week and were expected to continue this week.
"Although the Argentine corn crop has likely borne the worst of the brunt of dry weather with recent rain unlikely to be able to undo the damage on yield, the rain has come in time for the crucial developing stage of the soybean crop," Barclays Capital said in a note.
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