April 12, 2010

US soy, wheat futures climb on weaker dollar

US soy, corn and wheat rallied as the dollar weakened, boosting the appeal of US crops to traders and investors.

Soy for May delivery rose as much as 1% to US$9.6125 a bushel on the Chicago Board of Trade, and was at US$9.58 at 10:37 a.m. Singapore time. Corn for July delivery advanced as much as 1.1% to US$3.6125 a bushel, while wheat gained as much as 1% to US$4.8425 a bushel.

The Dollar Index, which tracks the value of the currency against the counterparts of six major trading partners, fell as much as 1.2% after European governments offered Greece a rescue package worth as much as EUR45 billion (US$61 billion) at below-market rates in a bid to stem its fiscal crisis.

"News from Europe has weakened the dollar and that's pushing grain prices higher," Toby Hassall, a research analyst at CWA Global Markets Pty said. Still, fundamentals are not strong across the complex overall, Hassall said, referring to corn, soy and wheat.

"It's hard to see Chicago wheat prices rallying for a sustained period," Hassall said. "We've seen Black Sea and European wheat competing for the global export market."

A halt in Chinese purchases of Argentine soyoil may help to support soy prices in Chicago on speculation crushers may buy more soy from other suppliers including the US, Hassall said.

China stopped approving permits to import soyoil from Argentina as a trade rift widens between the biggest buyer and largest supplier of the commodity.