October 28, 2011
CBOT wheat, soy advance as Europe debt crisis agreement eases concerns
CBOT wheat, soy and corn rose on October 27 (Thu), rebounding from two days of declines as Europe agreed on a plan to control the region's debt crisis.
A rescue fund's firepower will be increased to EUR1 trillion (US$1.4 trillion) and bondholders will accept 50% losses on Greek debt under the accord, reached at a second crisis summit in four days. The Standard & Poor's GSCI Index of raw materials gained as much as 1.7%, advancing for a fourth session in five.
"With the news out of Europe as noted above that all is well, at least for the moment, grains are markedly higher," said Dennis Gartman, the Suffolk, Virginia-based economist.
Corn for December delivery climbed 1.6% to US$6.47 a bushel. The grain is up 9.3% this month on increased sales.
Soy for January delivery gained 1.9% to US$12.43 a bushel. That extended the oilseed's rally this month to 5.4%.
Wheat for December delivery rose 2.2% to US$6.33 a bushel. The grain has advanced 3.9% in October. Milling wheat for January delivery gained 0.4% to EUR184.50 (US$261.4) a tonne on NYSE Liffe in Paris.
Rough rice for delivery in January added 0.5% to US$17.25 per 100 pounds in Chicago.
"We've seen a bit of demand coming into the markets at these levels across the board for grains, largely driven out of Asia and the Middle East," Michael Pitts, commodity sales director at National Australia Bank Ltd., said.
Egypt, the world's biggest wheat importer, yesterday bought 120,000 tonnes of the grain grown in Russia at US$243.44 a tonne. The price was "very competitive," Pitts said.