Chicago Board of Trade (CBOT) grains and soy complex futures rebounded with equities and gold markets on Tuesday after a sell-off in the previous session triggered by concerns raised by weaker-than-expected economic data from China.
New York gold futures rebounded more than $25 per ounce on Tuesday, the Dow was up about 125 points and the dollar fell nearly a full per cent (all figures US$).
"We overdid it yesterday. We're now bringing it back and will take a look at fundamentals unless there is another big drop in the outside markets," said Shawn McCambridge, an analyst for Jefferies Bache.
CBOT May wheat plunged nearly three per cent on Monday and was up 1.41 per cent on Tuesday, or 9-3/4 cents per bushel, at $7.03-1/2 per bushel.
May corn had dropped 1.8 per cent and rebounded 2.55 per cent, or 16-1/2 cents per bushel, to $6.63-1/4, and May soybeans during Monday's session fell 1.3 per cent and were up nearly 1.18 per cent, or 16-1/2 cents per bushel, at $14.11-1/2 per bushel in Tuesday's trading session.
Low U.S. winter wheat crop condition ratings and wet and cold weather that was slowing corn plantings in the U.S. Midwest contributed to the advances of wheat and corn futures prices, traders said.
The U.S. Department of Agriculture late on Monday, in its weekly crop progress report, said 36 per cent of the U.S. winter wheat crop was in good-to-excellent condition, unchanged from a week ago but well below the 64 percent good-to-excellent rating a year ago.
The worst drought in more than 50 years, together with cold weather in early spring that harmed some of the crop, have combined to lower the conditions for the 2013 U.S. winter wheat crop.
USDA also pegged U.S. corn plantings at only two per cent complete, down from 16 per cent a year ago and behind the seven per cent five-year average seeding pace.
Corn plantings were at a four-year low and an agricultural meteorologist on Tuesday said wet and cold weather into late April and early May likely would keep seedings at a minimum.
Don Keeney, a meteorologist for MDA Weather Services, also said cold weather late this week could possibly cause more harm to the U.S. Plains hard red winter wheat crop.
Strong U.S. exports of soymeal to be used as livestock and poultry feed are further lifting soybean futures prices, traders said.
"I think crushers were surprised by the good meal exports last week so they need beans," said Roy Huckabay, an analyst for The Linn Group.
USDA, in its weekly export sales report last Thursday, said U.S. soymeal exports during the week that ended April 4 totaled 227,100 tonnes, above estimates for 50,000 to 200,000 tonnes.
Additional support for soybeans stemmed from slow exports of soybeans by South America.
Hamburg, Germany-based oilseeds analysts Oil World said on Tuesday that the slow start of exports from South America's new soybean crop in March and April may compel China to buy more U.S. soybeans in coming weeks.
China is expected to remain the world's largest buyer of soybeans, despite an outbreak of bird flu that could trim demand for soymeal if significant numbers of Chinese poultry flocks have to be slaughtered due to disease.
Traders also said the soybean futures market was being influenced by traders buying the old-crop contracts such as spot May and selling the new-crop November contract in what is called in the trade as bull-spreading.
"I think there is pressure on November because there could be significant switching of corn planting intentions to soybeans, especially in the north where it may be too cold and wet to plant corn," Huckabay said.
-- Sam Nelson reports on the CBOT grain and soy complex markets for Reuters from Chicago.