Corn, Soybeans Rise First Time in Four Days on Crude Rebound

By Jae Hur and Sungwoo Park

July 22 (Bloomberg) -- Corn and soybeans rose for the first time in four days after crude oil rebounded from a six-week low, boosting the demand prospect for biofuel made from the two biggest U.S. crops. Wheat also gained.

The gains came after corn and soybeans fell to the lowest in six weeks yesterday on speculation warm, wet weather in the U.S. Midwest will boost the yield potential. Crude was little changed after recovering yesterday as a storm entered the Gulf of Mexico, and Iran resisted demands to suspend nuclear research.

``Crude oil has been leading commodities as sort of a benchmark recently, and a rebound in oil seems to help stop a selling spree in grains,'' said Han Sung Min, a manager at international marketing division of Korea Exchange Bank Futures Co., by phone from Seoul.

Corn for December delivery rose as much as 4.25 cent, or 0.7 percent, to $6.125 a bushel in after-hours trading on the Chicago Board of Trade and traded at $6.1175 at 3:52 p.m. in Singapore. Futures yesterday fell as low as $6.0275, the lowest since June 4, as recent rain was expected to improve crop conditions. Corn has fallen 23 percent from a record $7.9925 on June 27.

Soybeans for November delivery gained as much as 18.25 cents, or 1.3 percent, to $14.2125 a bushel and traded at $14.2075 as of 3:51 p.m. Singapore time. Futures have fallen 13 percent since reaching a record $16.3675 on July 3.

Crude oil for August delivery was up 0.5 at $131.71 a barrel at 3:49 p.m. in Singapore on the New York Mercantile Exchange. Yesterday, futures rose 1.7 percent to settle at $131.04 a barrel. It was the first increase in five days.

Crop Conditions

``The weekly crop conditions report was largely within expectation,'' said Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co. ``But one thing that I am concerned is a slower pace of corn silking and soybean blooming.''

About 65 percent of the corn crop was in good or excellent condition as of July 20, compared with 64 percent a week before and 62 percent a year earlier, the U.S. Department of Agriculture said yesterday in a report. About 61 percent of soybeans got the top ratings, compared with 59 percent a week before and 61 percent a year earlier, the USDA said.

About 34 percent of the corn crop was in the ``silking'' stage, a reproductive phase that helps determine how many kernels each ear of corn produces, down from 72 percent a year earlier and below the five-year average of 60 percent, the USDA said. An estimated 45 percent of the soybeans were making flower blooms that will develop pods in August, down from 70 percent a year earlier and below the five-year average of 65 percent, it said.

Wheat Gains

Wheat for September delivery climbed 0.3 percent to $7.935 a bushel at 3:48 p.m. in Singapore. Prices have declined 41 percent from a record $13.495 on Feb. 27 as higher prices spurred farmers to plant more.

Japan bought 66,000 metric tons of milling wheat today. Iran will import its first consignment of 1 million tons of wheat in a month's time, Sarmayeh reported yesterday, citing Deputy Commerce Minister Majid Parsania. It will thereafter continue importing wheat at a monthly rate of 1 million tons, the newspaper said.

To contact the reporters responsible for this story: Jae Hur in Singapore at jhur1@bloomberg.net; Sungwoo Park at spark47@bloomberg.net