US wheat, corn and soyabean futures rallied on Monday, bolstered by hopes for improving export prospects due to increased demand from China as well as decreased competition from Argentina, traders said.
Wheat notched the biggest gains, with the most-active Chicago Board of Trade soft red winter wheat contract surging 3.8% to hit its highest in 5-1/2 months. Corn jumped to its highest since Nov. 1 and soyabeans hit their highest since November 18.
"The grain markets took positive momentum into the weekend on the heels of a 'phase one' trade deal with China, and the good vibes continue today despite plenty of uncertainty on the real, ultimate effect of the agreement on US Ag exports," Matt Zeller, director of market information at INTL FCStone, said in a note to clients.
Under the trade agreement announced last week, Washington will reduce some tariffs on Chinese imports in exchange for Chinese purchases of agricultural, manufactured and energy products increasing by about $20 billion over the next two years.
At 11:46 a.m. CST (1746 GMT), Chicago Board of Trade March soft red winter wheat futures were up 20-3/4 cents at $5.53-1/4 a bushel. CBOT January soyabeans were 11-1/4 cents higher at $9.18-3/4 a bushel and CBOT March corn was up 6-3/4 cents at $3.87-3/4 a bushel.
Argentina's new centre-left government hiked export levies on soya, wheat and corn, an official decree on Saturday showed.
The measure, which will raise the levy the rate for soyabeans, soyaoil and soyameal to 30% from about 25% and the rate for corn and wheat to 12% from around 7%, was anticipated as the authorities tackle a debt crisis, but could curb export flows in the short term. Wheat prices drew additional support from sowing difficulties in Europe and the Black Sea region.
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