Corn, Soybeans Jump on Demand Outlook Before Revised U.S. Data

By Jae Hur

Oct. 28 (Bloomberg) -- Corn and soybeans gained for a second day on speculation price drops to the lowest in a year may boost export demand and on concern that U.S. acreage forecasts may be revised down in a government report today.

Corn fell as low as $3.64 a bushel yesterday, the lowest since Oct. 25, 2007, and has tumbled 49 percent from a record in late June. Soybeans have fallen 42 percent from a record in early July, touching $8.38 on Oct. 16, the lowest since August 2007. The U.S. government will revise its October production data today.

``It's bargain hunting,'' Kaname Gokon, deputy manager of research at Okato Shoji Co., said by phone in Tokyo. With declining freight costs, the recent drops in corn and soybeans have boosted interest among overseas buyers, he said.

Corn for December delivery rose as much as 19.75 cents, or 5.1 percent, to $4.05 a bushel in electronic trading in Chicago and was at $4.0475 at 4:18 p.m. Singapore time. The price, which gained 3.4 percent yesterday, reached a record $7.9925 on June 27.

Soybeans for January delivery gained as much as 54.5 cents, or 6.1 percent, to $9.52 a bushel and stood at $9.485 by 4:19 p.m. Singapore time. Futures touched a record $16.3675 on July 3.

The National Agriculture Statistics Service, a unit of the USDA, will release a revised October crop-production report today with corrected acreage estimates. The USDA didn't provide further details about the report, which will be released at 8:30 a.m. in Washington. The original report was released Oct. 10.

The news came as a surprise to the market, said Doug Whitehead, a soft commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne.

`Bullish Number'

``We're seeing gains in corn and soy a result of speculation that the USDA will spring a bullish number in their revision to the October Crop Production report,'' said Toby Hassall, an analyst at Commodity Warrants Australia in Sydney.

The soybean harvest was 76 percent complete as of Oct. 26, compared with 67 percent a week earlier and 81 percent a year earlier, the government said yesterday after the Chicago market closed. About 39 percent of the corn crop was harvested, compared with 29 percent a week earlier and 70 percent a year earlier, the USDA said.

U.S. export inspections for soybeans were 41.3 million bushels for the week ending Oct. 23, up 21.5 percent from a year earlier, the USDA said yesterday. This came after export inspections of 44.8 million bushel the previous week.

The Baltic Dry Index, a measure of shipping costs for commodities, lost for a 16th straight session as a global economic slowdown threatened growth and a pricing standoff disrupted iron ore trade. The index fell 4.9 percent to 1,048 points, according to the Baltic Exchange. That's the lowest since September 2002.

About 65 percent of winter wheat was in good or excellent condition as of Oct. 26, compared with 55 percent a year earlier, the USDA said in its first rating for this season's crop. About 84 percent of the crop was planted, up from 79 percent a week earlier and 69 percent had emerged from the soil, up from 60 percent last week.

Wheat for December delivery added as much as 17.5 cents, or 3.3 percent, to $5.47 a bushel and was at $5.4275 by 4:19 p.m. Singapore time. The price fell to $4.965 on Oct. 24, the lowest since May 30, 2007. Wheat has fallen 60 percent from a record $13.495 on Feb. 27.

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