Soybeans Rally for First Day in Three; Corn Little Changed

By Jae Hur

July 16 (Bloomberg) -- Soybeans rose for the first time in three days after touching a one-week low as investors bet recent declines were overdone, while corn was little changed, trading close to a one-month low.

Soybeans have declined 5 percent in the past two days on speculation that favorable weather in parts of the U.S. Midwest will boost crop prospects. Corn lost 6 percent in the two-day period. Dry weather helped revive crops ravaged last month by floods along the Mississippi and Iowa rivers, and timely rains fell in some growing areas.

``It's purely a technical adjustment,'' said Nicholas Chung, senior manager of the commodity derivatives team at Korea Development Bank in Seoul. ``Overall market sentiment is not bright following slumping crude oil prices and declining global equity markets.''

Soybeans for November delivery rose as much as 9.75 cents, or 0.6 percent, to $15.2575 a bushel in after-hours trading on the Chicago Board of Trade and stood at $15.2275 at 10:52 a.m. Singapore time. The contract earlier traded as low as $15.1325, the lowest since July 8. The most-active futures have risen 75 percent in the past year, reaching a record $16.3675 on July 3.

Corn for December delivery was down 0.75 cents at $6.66 a bushel at 10:55 a.m. Singapore time. The contract lost 2.3 percent yesterday after falling to $6.615, the lowest since June 10. The most-active futures still have gained 91 percent in the past year, reaching a record $7.9925 on June 27, on rising demand for the grain to feed livestock and to produce biofuel.

`Fundamentals Bullish'

``Fundamentals for corn and soybeans are still bullish, but they can not be free from a worsening credit crisis,'' Chung said. ``At the moment, some investors are trying to get out of commodities to make up for losses from stocks or for cash.''

The MSCI Asia-Pacific Index, set to close at its lowest since October 2006, has lost 18 percent this year. U.S. stocks dropped yesterday, sending the Standard & Poor's 500 Index to the lowest since 2005, as a plunge in oil dragged down energy shares and investors lost confidence in the government's plan to rescue Fannie Mae and Freddie Mac.

Crude oil yesterday had its largest dollar decline since Jan. 17, 1991, and the biggest percentage drop since March as slowing economic growth reduces demand. Federal Reserve Chairman Ben S. Bernanke yesterday said risks to growth and inflation have risen.

Wheat for September delivery fell 4 cents, or 0.5 percent, to $8.07 a bushel at 10:56 a.m. Singapore time, dropping for a third day. The contract earlier dipped to $8.04, the lowest since June 10. Prices have slumped 40 percent from a record $13.495 set on Feb. 27 as higher prices spurred farmers to boost planting.

Wheat regions in Western Australia state, the nation's biggest grower of the grain, have received their ``best rain'' of the cropping season, CBH Group said today.

There was between 10 millimeters (0.4 inch) and 40 millimeters of rain overnight, Michael Musgrave, operations manager for CBH, the state's largest grain handler and marketer, said. Rain fell across the majority of the wheat belt, he said.

In the export market, Egypt bought 240,000 metric tons of wheat yesterday. Japan is seeking to buy 76,000 tons of milling wheat at a tender tomorrow.

To contact the reporter on this story: Jae Hur in Singapore at jhur1@bloomberg.net