Soybeans Extend Gain as 13-Month Low May Attract Chinese Buyers

By Jae Hur

Oct. 8 (Bloomberg) -- Soybeans advanced for a second day on speculation that China's purchases may rise after prices fell to a 13-month low and on optimism that emergency measures in the U.S. and Europe will revive economic growth and boost demand.

The oilseed gained as much as 6.8 percent today, corn climbed for the first time in 10 days and wheat advanced. China was said in early trade to place orders for about 5,000 soybean contracts for nearby delivery months, Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said. This is equal to about 680,000 metric tons.

``The grain market has been driven by growing concern over the global credit crisis,'' Shigemoto said. ``If the concern calms down, the fundamentals of the market will attract attention again.''

Soybeans for November delivery jumped as much as 63 cents to $9.89 bushel in after-hours electronic trading on the Chicago Board of Trade and were at $9.5525 as of 12:20 p.m. Singapore time. The oilseed earlier fell to $9.145, the lowest since Sept. 12, 2007. Futures reached a record $16.3675 on July 3.

The Standard & Poor's GSCI Index of 24 commodities rose 1.3 percent yesterday, gaining by the most in a week after the Federal Reserve said it will create a special fund to boost liquidity for debt that hundreds of companies use to finance payrolls and other cash needs. The gauge fell to an 11-month low on Oct. 6.

Chicago futures also gained after Argentine farmers began a protest outside congress yesterday to pressure the government to remove taxes and restrictions on exports of grains and beef.

Farmers Strike

Farmers withheld grains and beef in their fifth day of a strike set to end today. Argentine President Cristina Fernandez de Kirchner will tomorrow announce measures to help small farmers and producers hit by a drought.

The 14-day relative strength index, a gauge of momentum, has fallen below 30 since Oct. 2 for corn and soybeans, signaling prices may rise.

Corn for December delivery advanced as much as 15.5 cents, or 3.7 percent, to $4.325 a bushel after falling to $4.1275 a bushel, the lowest since Dec. 7. The contract was at $4.2875 by 12:39 p.m. Singapore time. Futures touched a record $7.9925 on June 27.

Wheat for December delivery rose as much as 16.25 cents, or 2.7 percent, to $6.195 a bushel and was at $6.1325 as of 12:40 p.m. in Singapore.

The contract gained 1.3 percent yesterday on speculation that U.S. export sales will rise after prices on Oct. 6 slumped to $5.88, the lowest since July 9, 2007. Futures reached a record $13.495 on Feb. 27.

In China, January-delivery soybeans on the Dalian Commodity Exchange fell as much as 5 percent to 3,461 yuan ($508) a metric ton, plunging by the daily limit for the third straight day. Corn for May delivery rose as much as 1.8 percent to 1,680 yuan and was at 1,666 yuan by the midday break.

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