US grain futures rose on Monday, with soyabeans hitting a 10-day high, as a plan promised by Germany and France to re-capitalise Europe's banks eased concerns over global economic growth. The optimism weighed on the dollar index, which was down 1.7 percent. Markets also shrugged off negative fundamentals including a strong corn and soyabean harvest weekend and heavy rains over parched southern Plains wheat fields.
"This is simply fund buying after the European bank situation has calmed down a little bit," said Jim Hemminger, senior risk manager with Top Third Ag Marketing. Soyabean prices rose 1.9 percent, their biggest daily gain in percentage terms in more than six weeks. Wheat and corn also rose but closed well below their session highs.
Soyabeans benefited the most from currency fluctuations as the Brazilian real rose more than 5 percent against the US dollar, which makes US soyabean exports more competitive with offerings from South America, said Mike Zuzolo, president of Global Commodity Analytics and Consulting. 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 re-capitalise European banks and present a plan for accelerating economic co-ordination in the eurozone by a G20 summit in Cannes on Nov. 3-4.
The news weakened the US dollar, a sign that investors are willing to put some riskier assets into their portfolios. A weak dollar also makes US commodities more attractive to investors looking for a hedge against inflation. "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, referring to stronger-than-expected US jobs data released on Friday.
CBOT November soyabeans settled up 22-1/2 cents at $11.80-3/4 a bushel. CBOT December corn was up 5 cents at $6.05 a bushel and CBOT December wheat was up 4 cents at $6.11-1/2 a bushel. Volumes for all agricultural commodities were light ahead of the US Agriculture Department's monthly supply and demand estimates, due on Wednesday. Attention will be focused on the corn balance in the United States, and traders expect that a cut to acreage will be mostly offset by improved yields. "They are just not willing to take a step out there and buy into it before they have more concrete information from the government," said Zuzolo.