* Funds buying grains/commodities
* Weak dollar supporting grain market
* Goldman Sachs bullish on commodities
(Updates to include U.S. trading session, fresh analyst
quotes, changes dateline from LONDON/SINGAPORE)
By Sam Nelson
CHICAGO, Nov 11 (Reuters) - U.S. corn and wheat futures
rose 1 percent on Wednesday on fund buying of grains as the
dollar fell and while crude oil, gold and equities gained.
Soybean futures also rose as new money kept piling into a
basket of commodities ranging from crude oil and gold to wheat
and cotton.
"It's simply money flow, you can't explain it any other
way, money is coming into commodities, including grains," said
Joe Bedore, CBOT floor manager for trade house FC Stone.
The dollar hit a 15-month low against a currency basket on
Wednesday after Federal Reserve officials said any recovery in
the U.S. economy would be erratic, bolstering the view that
interest rates would stay low.
A falling dollar makes U.S. commodities a better buy for
importers using such currencies as the euro and yen.
Wheat, corn and soybeans kept marching higher despite
plentiful supplies of each as shown in the U.S. Department of
Agriculture's (USDA) November crop report that was released on
Tuesday.
"There are two major bullish factors here. Funds are buying
grains and the dollar is falling, the fundamentalists who sold
the market because of big crops are gone...no one wants to sell
with this kind of money coming in," Bedore said.
At 10:27 a.m. CST (1627 GMT), December delivery wheat was
up 6 cents per bushel at $5.29, corn for December was up 2-1/2
at $3.97 and November delivery soy was up 3-3/4 at $9.65-1/4.
"People are still looking at crude oil, they are looking at
dollar weakness. They are also looking at fund buying,
particularly of corn," one European dealer said.
Traders said a report this week from Goldman Sachs that
remained upbeat on commodities and forecast corn prices 12
months out at $4.50 per bushel, also boosted the corn market.
Also "there was a report yesterday that a fund was going to
buy 62,000 corn contracts in January, 20,000 wheat and 15,000
to 20,000 beans, no one wants to stand in the way of that
buying, so we're going up," Bedore said.
Improved corn and soybean harvesting weather in the United
States, normally a bearish market factor, was being discounted
by the market in favor of the bullish impact of fresh
speculative buying.
Prices at 10:31 a.m. CST (1631 GMT)
Pct 2008 YTD
Last Change Chg Close Pct Chg
---------------------------------------------------------------
CBOT corn Cc1> 3.9750 0.0300 0.8 4.07 -2.3
CBOT soy Sc1> 9.6600 0.0450 0.5 9.7225 -0.6
CBOT meal SMc1> 289.90 1.70 0.6 300.5 -3.5
CBOT soyoil BOc1> 0.3814 0.0058 1.5 0.3329 14.6
CBOT wheat Wc1> 5.2975 0.0675 1.3 6.1075 -13.3
CBOT rice RRc2> no trade
EU wheat BL2F0> 131.25 1.75 1.4 137 -4.2
US crude CLc1> 79.19 0.14 0.2 44.60 77.6
Dow Jones .DJI> 10277 30 0.3 8776 17.1
Gold XAU=> 1113.30 8.00 0.7 878.20 26.8
Euro/dollar EUR=> 1.4976 -0.0009 -0.1 1.3978 7.1
Dollar Index .DXY> 75.1200 0.0990 0.1 81.1510 -7.4
Baltic Freight .BADI> 3748 133 3.7 774 384
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*In U.S. dollars, front-month contracts, except EU wheat, which
is in euros, CBOT wheat, corn and soybeans per bushel, rice per
hundredweight, soymeal per ton and soyoil per lb.
(Reporting by Sam Nelson; additional reporting by Nigel Hunt
in London and Naveen Thukral in Singapore; Editing by
Marguerita Choy)
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