US soy at 1-week top on Euro zone debt deal hopes
Corn rose 1.8 percent with additional support stemming from expectations that China will import corn to meet its growing demand as it returns from a week-long national day break.
Asian shares and the euro edged up after the leaders of France and Germany pledged to unveil a comprehensive plan to solve the euro zone's two-year-old sovereign debt crisis by the end of the month.
European policymakers have been under pressure from volatile financial markets, amid fears the crisis is heading inexorably towards a default by Greece -- and perhaps others -- that could unleash turmoil in the banking system.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks in Berlin on Sunday that their goal was to come up with a sustainable answer for Greece's woes, agree how to recapitalise European banks and present a plan for accelerating economic coordination in the euro zone by a G20 summit in Cannes on Nov. 3-4.
"There is improved risk appetite with efforts being made in Europe to solve the debt crisis and also there was good news from the US," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore. "The harvest of corn and soybeans is progressing well which may add some pressure."
The US Labor Department reported a rise of 103,000 in nonfarm payrolls last month, higher than the 60,000 expected by economists polled by Reuters and better than August's upwardly revised 57,000 gain.
Chicago Board of Trade December corn rose 1.8 percent to $6.10-1/2 a bushel by 0238 GMT and November soybeans also gained 1.8 percent to $11.79-1/4 a bushel. December wheat was up 2.1 percent to $6.20-1/4 a bushel.
The dollar index , which measures the strength of the greenback against as basket of currencies, fell 0.4 percent, making dollar-priced US commodities attractive to foreign buyers.
The grain and oilseed markets are expected to remain volatile ahead of the monthly US agriculture department report on global demand and supply of agricultural products on Wednesday.
A Reuters Poll showed analysts on average expected the USDA to marginally raise corn yield to 148.8 bushels per acre from 148.1 bushels in September. They were expecting the soy yield to be unchanged at 41.8 bushels per acre.
The US harvest is advancing under perfect weather conditions that have weighed on corn and soy values. Soybeans have lost 20 percent in about a month, while corn is down 25 percent from its all-time high of nearly $8 a bushel in June.
The market is expecting China, the world's second largest consumer, to buy US corn as the nation struggles to meet strong demand from its booming livestock industry.
China may need to import five times as much corn as the US government expects over the next year, according to the US Grains Council, setting the stage for another potentially explosive year for prices.
And Argentina hopes to sign a deal with China in November that would clear the way for corn exports to the Asian country.
Copyright Reuters, 2011