June 15, 2010

Chicago wheat and soy both rallied Monday (Jun 14) on speculations that the wet weather may hamper the US winter wheat harvest and slowdown soy planting in some areas in the Midwest; corn climbed on a brighter global demand outlook.

July corn climbed 4.25 cents, or 1.2%, to US$3.5375 a bushel. July soy was up 5.25 cents or 0.6% to US$9.515 a bushel. July wheat surged 10.75 cents, or 2.4%, to US$4.515 per bushel.

US dollar fell against euro on Monday as the robust European industrial production relieved investor's anxiety over the sluggish European economy. A weaker dollar and a sharply higher crude oil price have both contributed to set a strong tone for grain futures.

Meanwhile, USDA announced a sale of 120,000 tonnes of corn to China for delivery during the current 2009/10 crop year on Monday morning, which offered minor support to corn price.

The speculations that excessive moisture in parts of Kansas, the major US winter-wheat producer, may slowdown the harvest of soft and red winter wheat, and the heavy rainfalls in Iowa and Illionis could prevent soy seeding, also lifted wheat and soy prices. "We are now into the too much rain scenario that could be followed by high-pressure-high-temperature in the next two weeks, so volatility and price psychology is about to change dramatically over the next two weeks," said David Hightower with the Hightower Report.