Corn, Soybeans Gain for Second Day as Dollar Falls, Crude Rises

By Jae Hur

Sept. 22 (Bloomberg) -- Corn and soybeans extended gains as the dollar fell against the euro, boosting demand for U.S. supplies, and crude oil advanced, lifting the appeal of the crops as biofuel. Wheat also advanced.

Treasury Secretary Henry Paulson's plan to end the rout in U.S. financial markets may derail the dollar's three-month rally as investors weigh the costs of the rescue. Crude oil jumped as much as 7.4 percent on Sept. 19. Corn rose as much as 3.9 percent the same day and soybeans gained as much as 3.7 percent.

``Grains were supported as concerns over the financial system were easing after the U.S. government's plan that sent the dollar lower and crude oil higher,'' Kenji Kobayashi, an analyst at Kanetsu Asset Management Co. in Tokyo, said today by phone. ``The grain market still is fundamentally strong. And it had fallen too much just because of the external factors.''

Corn for December delivery added as much as 7.5 cents, or 1.4 percent, to $5.4975 a bushel in after-hours trading on the Chicago Board of Trade. It was at $5.4650 at 11:25 a.m. Singapore time, down 32 percent from a record $7.9925 on June 27.

Soybeans for November delivery gained as much as 18.5 cents, or 1.6 percent, to $11.62 a bushel and last traded at $11.5425. The oilseed has lost 30 percent from a record $16.3675 on July 3.

Still, both markets have fallen for three of the past four weeks. Corn dropped 3.7 percent last week, and soybeans declined 4.9 percent.

Oil, Dollar

Crude oil traded little changed at $104.40 a barrel, near a two-week high in New York, on speculation the U.S. government's rescue plan will spur demand. The dollar traded near a two-week low against the euro.

The Bush administration yesterday widened the scope of its $700 billion rescue plan to include assets other than mortgage- related securities. The changes may make the cost of the bailout ``significantly higher'' than originally considered, said Josh Rosner, an analyst with independent research firm Graham Fisher & Co. in New York.

Wheat for December delivery rose as much as 15.75 cents, or 2.2 percent, to $7.3375 a bushel and stood at $7.31 as of 11:25 a.m. Singapore time. Futures have lost 46 percent from a record $13.495 on Feb. 27.

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