SINGAPORE: US corn and wheat futures rose around 1.5 percent on Thursday on bargain hunting after a selloff this week triggered by Japan's devastating earthquake, which raised doubts over the nation's grain imports.
Soybeans rose 1 percent, extending gains, with prices supported by a rain-dampened harvest in Brazil's top growing state, Mato Grosso, and the unwinding of long corn/short soybean spreads.
Corn lost more than 7 percent in the last two sessions on signs that grain cargoes were stranded off Japan, casting a long shadow over demand from the world's top corn importing nation.
"The grain markets are volatile because Japan is a major corn importer and we are not sure about the nuclear situation," said Ker Chung Yang, investment analyst at Phillip Futures in Singapore.
"Today's action can be some bargain hunting but sentiment is still bearish as Japan is still struggling to contain radiations."
Chicago Board of Trade May wheat rose 1.5 percent to $6.71-3/4 a bushel by 0335 GMT. CBOT May corn also gained 1.5 percent to $6.26 a bushel and May soybeans rose 1.07 percent to $13.00-3/4 a bushel.
The front-month May corn has lost 15 percent so far this month, while May wheat is down 18 percent as investors shunned risk following social unrest in the Middle East earlier and Japan's nuclear crisis now. May soybeans have lost 5 percent.
The situation in Japan, struggling to recover after last week's earthquake and tsunami, remains at the forefront of the market.
Operators of a quake-crippled nuclear plant in Japan dumped water on overheating reactors on Thursday while the United States expressed growing alarm about leaking radiation and urged its citizens to stay well clear of the area.
Trade sources said at least nine vessels carrying grain bound for Japan were unable to discharge their cargoes. The ships' cargoes included grains from the United States and soybeans from South America.
In addition, shipping sources said some ship-owners were considering avoiding high-risk areas in Japan and might re-route their vessels due to fears over the potential spread of radiation.
Grain markets were also spooked by a dire warning by the European energy chief about "further catastrophic events" in Japan, leading investors to reduce their positions.
Europe's energy chief warned of a further catastrophe at Japan's Fukushima Daiichi nuclear site on Wednesday, prompting a global market selloff, but his spokeswoman said he had no special information on the stricken plant.
Still, France's farm minister said on Wednesday that lagging supply should keep global food prices high this year, with the market's fall after Japan's earthquake and tsunami expected to be short-lived.
A survey released on Wednesday by research and brokerage firm Allendale Inc. indicated farmers plan to cut back on soybean plantings as they seek to capitalize on demand for corn.
US farmers are expected to plant 91.291 million acres (36.95 million hectares) of corn, 77.193 million acres of soybeans and 57.435 million acres of wheat, according to the survey.
The US Agriculture Department's latest estimate calls for slightly higher corn acreage at 92 million, with soybean acreage at 78 million and wheat acreage at 57 million.
In Brazil, the flow of newly harvested soy and corn to Brazil's main grain port resumed on Wednesday as the principal railway and road to the port again allowed bulk cargoes to pass, after access was shut off due to rain.
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