Forexpros – U.S. corn and wheat futures rallied sharply in early European trade on Thursday, as the previous day’s steep declines to three-month lows created bargain-buying opportunities for investors reluctant to bet that prices will fall further, while soybeans edged higher as well.

On the Chicago Mercantile Exchange, corn futures for May traded at USD6.1638 a bushel during European morning trade, rallying 2.45%. It earlier rose by as much as 2.8% to trade at a session high of USD6.1850 a bushel.

Thursday’s gains came after prices tumbled to USD5.9900 a bushel on Wednesday, the lowest since January 19, as agricultural commodities came under selling pressure by broader market risk aversion.

But the steep decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid a favorable demand outlook from China.

Market analysts and industry officials say strong domestic prices in China and low reserves are likely to force the Asian nation to import more U.S. corn this year.

The U.S. produced 38% of the world’s corn last year, making it the both world’s largest corn producing nation and the largest exporter of the grain, while China is the world’s largest consumer of the grain.

Corn prices have been under heavy selling pressure in recent sessions, losing nearly 8% since April 3 after U.S. government data revealed that U.S. farmers planted the largest corn area since 1944, easing concerns over tightening global supplies.

Meanwhile, wheat for May delivery traded at USD6.2350 a bushel during European morning trade, jumping 2%. It earlier rose by as much as 2.1% to trade at a two-day high of USD6.2388 a bushel.

Wheat prices regained strength after plunging to the lowest level since January 20 during the previous session as traders closed out bets on lower prices.

Wheat prices have been under heavy selling pressure in recent sessions, losing almost 7% since March 30 on the view that global supplies are ample.

The U.S. Department of Agriculture said on Tuesday that approximately 64% of U.S. winter-wheat crops were rated in ‘good’ to ‘excellent’ condition as of last week, up from 61% in the preceding week and significantly higher than 36% in the same week a year earlier.

The above-average pace of U.S. spring-wheat plantings added to the view that global supplies of the grain are ample to meet demand.

Elsewhere on the Chicago Board of Trade, soybean futures for May traded at USD14.2325 a bushel, climbing 1.1%. It earlier rose by as much as 2.8% to trade at a session high of USD14.2588 a bushel.

Prices fell to as low as USD14.0350 a bushel on Wednesday, the lowest since March 30.

Soy prices have been well-supported close to an eight-month high hit earlier in the month as market sentiment has been dominated by concerns over distressed crops in major South American soy growers and on hopes demand from top consumer China will remain robust in the near-term.

The USDA early on Tuesday said U.S. exporters had sold 225,000 tonnes of soybeans to an unknown destination, thought by some to be China.

Meanwhile, analysts at Commerzbank, citing China National Grain and Oils Information Center estimates, said that China could import more than the 55 million tonnes estimated by the USDA to take advantage of increased processing margins.

China is the world’s largest soybean consumer and is expected to account for nearly 60% of global trade of the grain in the 2011-12 season, according to the USDA.

Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.

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