Forexpros – Soybean futures advanced for the first time in three days on Monday, rebounding from the previous session’s 13-month low on hopes that European leaders will boost efforts to tackle the region’s ongoing debt crisis.
On the Chicago Mercantile Exchange, soybean futures for January delivery traded at USD11.2312 a bushel during European morning trade, climbing 1.4%.
It earlier rose by as much as 1.65% to trade at a two-day high of USD11.2712 a bushel.
Agricultural commodities continued to be affected by developments surrounding the euro zone’s debt woes after German media outlets reported over the weekend that German Chancellor Angela Merkel and French President Nicolas Sarkozy were studying legal changes to the European Union treaty, which would include deeper financial integration among EU members.
The pact, if agreed, would also give the European Central Bank more scope to undertake large scale bond purchases.
The news boosted appetite for riskier assets, such as stocks and commodities and prompted investors to shun the U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, tumbled 1.04% to trade at 79.00.
A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Meanwhile, some mild bargain buying also lent support after soy prices fell to USD11.0288 a bushel on Friday, the lowest since October 2010.
Soybean futures have declined in five of the last eight trading sessions and have lost nearly 9% since the beginning of November, as large South American crop prospects and concerns over Europe’s debt crisis have been dominating sentiment in recent weeks.
However, the steep decline spurred some buying from traders reluctant to bet that prices would fall further amid speculation lower prices will lead China to increase its purchases of U.S. soybeans in the near-term.
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.
Elsewhere on the Chicago Mercantile Exchange, corn for March delivery jumped 2.1% to trade at USD6.0275 a bushel, while wheat for March delivery rallied 1.85% to trade at USD6.0025 a bushel.
Later in the day, the U.S. Department of Agriculture was to publish its weekly crop progress report, which will provide an indication on how U.S. crops fared over the past week.
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