US wheat and soy futures rally on higher demands

Chicago wheat and soy futures both rallied on Wednesday (June 16), lifted by increasing demand, wet weather and a strong rally in crude oil; while corn also climbed.

July soy rose 8.25 cents or 0.9% to US$9.5775 a bushel. July wheat surged 9.5 cents, or 2.1%, to US$4.6125 per bushel. July corn rose 2.5 cents, or 0.7%, to US$3.5625 per bushel.

Crude oil prices surged for a third straight session and settled at a six-week high on Wednesday, despite a rise in US crude inventories. The sharply higher oil price has given strong support to grain futures.

Meanwhile, analysts said the stock markets stabilised earlier, euro is no longer a grip of fear over these commodity markets, and crude oil price is heading toward US$80. And if crude oil heads toward US$80, commodities in general will rise.

The report that Saudi Arabia's state grains buyer is tendering to buy 990,000 tonnes of wheat has boosted wheat future on Wednesday, given the fact that lasting wet weather in the Canadian Prairies halted winter-wheat harvest and damaged crops. Meanwhile, the excessive moisture in US southern Plains brought winter-wheat harvest to a standstill.

Soy climbed on the report that more rainfalls are expected in the saturated Canadian prairies which may reduce acreage for canola, as well as the unconfirmed report that China would purchase more US soy.