Soybeans, Corn Rise on Optimism Credit Easing May Spur Demand

By Sungwoo Park

Oct. 14 (Bloomberg) -- Soybeans advanced a second day from a 13-month low, and corn rose the most in almost a month on speculation that central banks' moves to ease credit will spur demand for commodities. Wheat also advanced.

France, Germany, Spain, Austria and the Netherlands committed 1.3 trillion euros to guarantee bank loans and take stakes in lenders to prevent the collapse of the financial system. Stocks rallied worldwide, with the Standard & Poor's 500 Index gaining the most since 1939 yesterday after its worst week in 75 years.

``The European central banks did what the market has been thirsty for,'' said Nicholas Chung, senior manager of commodity derivatives at state-owned Korea Development Bank in Seoul. ``The moves have pushed up equities and then commodities across the board and this upward momentum is likely to continue today.''

Soybeans for November delivery rose as much as 30 cents, or 3.2 percent, to $9.58 bushel in after-hours electronic trading in Chicago and were at $9.5175 as of 2:39 p.m. Singapore time. The contract lost 8.3 percent last week and is down 42 percent from the record $16.3675 on July 3.

Corn for December delivery climbed as much as 17 cents, or 4.1 percent, the most since Sept. 17, to $4.285 a bushel and was at $4.21 by 2:36 p.m. in Singapore. The price fell 10 percent last week and is down 47 percent from a record $7.9925 on June 27.

Grain futures in Chicago also gained on speculation that a declining dollar and slumping shipping costs will spur demand for U.S. supplies from overseas importers, said Takaki Shigemoto, analyst at Tokyo- based commodity broker Okachi & Co.

The dollar fell as low as $1.3694 per euro after declining 1.3 percent yesterday to $1.3581 in New York. The Baltic Dry Index, a measure of shipping costs for commodities, had its second-biggest drop on record.

The freight index fell 11 percent yesterday to 1,976 points, according to the Baltic Exchange in London. That's the lowest since August 2005. The index, which dropped 11.3 percent on Oct. 10, is 83 percent lower than its record high reached in May. Bloomberg data on the measure go back to January 1985.

Wheat for December delivery rose as much as 21 cents, or 3.6 percent, to $6.095 a bushel and was at $6.03 as of 2:48 p.m. Singapore time. The price dropped 12 percent last week and is down 55 percent from the record $13.495 on Feb. 27.

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