Soybeans, Corn, Wheat Slump Amid Stocks Rout, Worsening Outlook

By Jae Hur

Oct. 10 (Bloomberg) -- Soybeans and corn plunged and headed for second weekly losses on speculation that a global economic slump will cool demand for food, animal feed and fuel. Wheat is poised for the seventh weekly decline.

Asian stocks slumped, driving down Japan's Nikkei 225 Stock Average 9.6 percent, and U.S. stock futures fell amid concern the deepening credit crisis will push the global economy into recession and spur corporate failures.

``Growing fear about the global financial system has overwhelmed fundamentals of the grain market,'' said Nicholas Chung, senior manager of the commodity derivatives team at state- owned Korea Development Bank in Seoul. ``It's like a total collapse across the board as people have lost the faith.''

Corn for December delivery declined as much as 22.75 cents, or 5.2 percent, to $4.155 a bushel in after-hours electronic trading in Chicago and was at $4.1775 by 3:55 p.m. Singapore time. The contract has fallen 8 percent this week and is 48 percent lower than a record $7.9925 on June 27.

Soybeans for November delivery lost as much as 53.75 cents, or 5.5 percent, to $9.2625 bushel and were at $9.35 as of 3:51 p.m. Singapore time. The oilseed fell to $9.11 on Oct. 8, the lowest since Sept. 12, 2007. The contract has lost 5.8 percent this week and is down 43 percent from a record $16.3675 on July 3.

Corn and soybeans rose yesterday on speculation that a U.S. Department of Agriculture production forecast tomorrow will be lower than earlier projections after flooding in June and dry weather in August hurt plants.

U.S. Crop

The forecast for the U.S. soybean crop will be 2.92 billion bushels, according to the average estimate of 20 analysts polled by Bloomberg News. That's down 0.5 percent from the USDA's September estimate of 2.934 billion and 9.1 percent more than last year's harvest, after farmers increased acreage planted with the oilseed by 11 percent.

The corn crop will total 12.062 billion bushels, according to the survey, compared with the government's forecast for 12.072 billion in September. Farmers last year collected a record 13.074 billion bushels after increasing the crop area to a 63-year high.

In China, January-delivery soybeans on the Dalian Commodity Exchange fell as much as the 5 percent daily limit to 3,313 yuan ($485) a metric ton, the lowest since July 27, 2007, and settled at 3,338 yuan. Corn for May delivery fell as much as 4.1 percent to 1,600 yuan, the lowest since Aug. 28, 2007, before settling at 1,620 yuan.

Wheat for December delivery declined as much as 26.75 cents, or 4.4 percent, to $5.78 a bushel, the lowest since July 3, 2007, and was at $5.8575 by 3:58 p.m. in Singapore. Wheat is down 57 percent from a record $13.495 on Feb. 27. The grain has lost 8.5 percent this week.

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