July 28, 2008

US and EU grains futures rise as feed buyers revert to cargoes

US and EU grains futures rose slightly on Friday (July 25), bouncing back from recent losses on a technical rebound as buyers return to the market for cargoes, said traders.

CBOT said corn for September CU8 delivery gained 1.2 percent to US$5.80 a bushel, while soy for August delivery increased 0.58 percent to US$13.93 per bushel.

Wheat for September delivery, however, was down 0.5 cents to US$7.88 per bushel.

The rise in corn comes after weeks of falling prices. Dealers said the feed industry would aim to increase usage of corn as prices had fallen by 25 percent since hitting historic highs in June.

Meanwhile, soy has dropped 15 percent since its record high in early July, due to optimistic crop forecasts on favourable weather in the US.

The Argentine government's decision to scrap a plan to increase soy export taxes also pushed down soy prices with Argentina returning as a strong competitor in soy exports.

In contrast, the wheat market has been under pressure due to global oversupply.

Traders stressed that all the main bearish elements - bumper crops worldwide and the ongoing harvest - had been priced in, and that demand will now have the strongest influence on grains futures.