The prices of wheat, soybeans, and corn traded in Chicago rose sharply on Monday after falls last week thanks to spillover support from strong equity markets and broad strength in other commodities.
Crude oil and metals prices rose on Monday after bargain hunting drove equity markets higher across Asia and Europe.
The Chicago Board of Trade’s most active soybean futures contract rose 1.1% to $13.05½ a bushel at 10:10 GMT.
Wheat jumped 1.5% to $7.39-1/4 a bushel while corn climbed 0.6% to $5.40¼ a bushel.
Soybeans fell to their lowest in nearly two months on Friday and corn also dropped due to concerns about economic growth along with reports of much-needed rain in the western U.S. Midwest and Plains growing region.
“Grains and soybeans were pushed down by the weak macro background last week and are being pushed up by the positive macro background as the week starts, despite bearish factors like welcome rain in parts of the United States,” said Matt Ammermann, StoneX commodity risk manager.
Soybeans fell on Friday after reports that the U.S. Environmental Protection Agency (EPA) is expected to recommend reducing federal biofuel blending mandates for 2021 to below 2020 levels.
“There also seems to be some reassessment today of the news the EPA may recommend reducing biofuel blending mandates in gasoline for 2021,” Ammermann said.
“The impact of this could be relatively moderate with only a few months left in 2021 while the EPA is talking about increasing the blending mandates for 2022. The biofuel demand for blending also depends on overall gasoline sales, not only the blending mandate,” he said.
Strong interest for grains and soybeans from buyers also underpinned prices on Monday.
“We continue to see strong international demand, with Pakistan tendering today for 400,000 tonnes of wheat and China buying U.S. soybeans last week,” a European trader said.
Report by Michael Hogan in Hamburg. Additional report by Naveen Thukral in Singapore. Edit by David Clarke.