Forexpros – Wheat futures turned higher on Tuesday, rebounding from a four-month low after Italy saw good demand at an auction of government debt earlier in the day, despite having to pay record high yields, while markets awaited the outcome of a meeting of euro zone finance ministers.
On the Chicago Mercantile Exchange, wheat futures for March delivery traded at USD5.9788 a bushel during European morning trade, jumping 0.89%.
It earlier rose by as much as 1.06% to trade at a daily high of USD5.9888 a bushel.
Agricultural commodities continued to be affected by outside influences after Italy auctioned a total of EUR7.5 billion of government debt, close to its maximum target level of EUR8 billion.
High demand at the auction, which was viewed as a key test of investor confidence in the country’s debt, helped ease concerns over Italy’s debt woes despite seeing borrowing costs spike to euro-lifetime highs.
Also Tuesday, finance ministers from the 17 European Union member states were to meet in Brussels to discuss the region’s financial crisis and ways to boost the firepower of the European Financial Stability Facility. The ministers were also expected to sign off on Greece’s next tranche of financial aid.
The U.S. dollar was broadly lower against most of its major counterparts, with the dollar index slumping 0.65% to trade at 78.87. A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Wheat futures declined to the lowest level since early June during the Asian trading session amid improving U.S. winter-wheat crop prospects.
The U.S. Department of Agriculture said in its weekly crop progress report published after markets closed Monday that approximately 92% of the winter-wheat crop emerged as of November 27, up from 87% a week earlier and broadly in line with the five-year average.
Nearly 52% of the U.S. winter-wheat crop was in ‘good’ to ‘excellent’ condition as of last week, up from 50% the week before. Approximately 13% was rated ‘poor’ to ‘very poor’, improving from 16% a week earlier.
Despite the gain, prices were expected to remain under pressure in the near-term as increasing competition for U.S. export sales has been weighing heavily on prices in recent weeks.
Wheat futures have declined in ten of the last 14 trading sessions and have lost nearly 9% in November.
Elsewhere on the Chicago Mercantile Exchange, corn for March delivery added 0.6% to trade at USD6.0163 a bushel, while soybeans for January delivery gained 0.77% to trade at USD11.2888 a bushel.
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