Soybeans Tumble to One-Year Low, Corn Drops on Demand Concerns

By Jae Hur

Oct. 6 (Bloomberg) -- Soybeans tumbled to the lowest in almost a year and corn dropped on signs slowing global economic growth, the dollar's strength and declining energy costs will reduce demand for the crops used in food, feed and fuel.

Asian stocks fell as the global credit crisis deepened in Europe and the U.S. lost the most jobs in five years last month The dollar climbed to a 13-month high against the euro and oil extended last week's 12 percent loss. Corn dropped 16 percent last week, the most since June 1986, and soybeans declined 15 percent, the biggest weekly decline since June 2004.

``Investors continue reducing risk in markets, such as stocks and commodities,'' Hiroyuki Kikukawa, general manager of research at IDO Securities Co., said from Tokyo. ``Fear of the credit crunch and a slowing global economy has been dominating the market, prompting investors to forget fundamentals for now.''


Soybeans for November delivery lost as much as 5.7 percent to $9.3525 bushel, the lowest for the most-active contract since Oct. 9, 2007, in after-hours electronic trading on the Chicago Board of Trade. Futures were at $9.37 by 2:29 p.m. Singapore time. The oilseed is down 43 percent from a record $16.3675 on July 3.

Corn for December delivery fell 21.75 cents, or 4.8 percent, to $4.35 a bushel, the lowest since Dec. 20, at 2:40 p.m. Singapore time. Futures have lost 46 percent from a June 27 peak of $7.9925.

Oil Declines

Crude oil for November delivery fell as much as 3.2 percent to $90.85 a barrel. Futures closed at $93.88 on Oct. 3, the lowest settlement since Sept. 16, after U.S. lawmakers approved a $700 billion bank-rescue plan and the country's Labor Department reported a bigger-than-expected, 159,000-drop in payrolls in Sept.

The dollar reached $1.3561 per euro, the highest since Sept. 4, 2007, before trading at $1.3579, lowering interest among overseas buyers holding other currencies. A drop in oil prices erodes demand prospects for biofuel made from corn and soybeans.

Corn may tumble as much as 15 percent to $3.87 a bushel in the next six months, and soybeans by 11 percent to $8.85 a bushel, according to Don Roose, president of U.S. Commodities Inc. in West Des Moines, Iowa. Commodities markets are heading for the biggest annual decline since 2001 as investors exit leveraged bets and slowing economic growth erodes demand for raw materials.

The value of the 19 commodities in the Reuters-Jefferies CRB Index fell $280.6 billion, or 43 percent, from its July 3 peak, a loss larger than their total worth two years ago, data compiled by Bloomberg show.

Wheat for December delivery declined as much as 29.25 cents, or 4.6 percent, to $6.11 a bushel, the lowest since July 23, 2007. It was at $6.1125 as of 2:34 p.m. in Singapore. The contract fell 11 percent last week, extending five weeks of losses. The price is down 55 percent a record high of $13.495 on Feb. 27.

Corn and soybean futures on the Dalian Commodity Exchange plunged by their 5 percent daily maximum at the opening today after a week-long holiday in China.

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