Corn, Soybeans Advance as Dollar, Stocks Boost Demand Outlook

By Jae Hur

Nov. 3 (Bloomberg) -- Corn and soybeans climbed for the first day in three on speculation a weakening dollar would boost demand for food, feed and fuel, and that stock market gains would revive investment in commodities.

The dollar fell against the euro as economists forecast a report today will show the Institute for Supply Management's manufacturing index dropped to the lowest level since October 2001. A weaker dollar may increase interest among importers of U.S. supplies. Asian stocks extended last week's rally.

``We saw a more positive tone in stock markets,'' said Toby Hassall, an analyst at Commodity Warrants Australia. ``Although the global demand outlook is weak, the improvement in market sentiment is helping corn and soy prices to bounce from their seasonal lows.''

Corn for December delivery advanced as much as 8.25 cents, or 2.1 percent, to $4.0975 a bushel in electronic trading in Chicago and was at $4.095 by 2:19 p.m. Singapore time. The price has fallen 49 percent from a record $7.9925 June 27.

Soybeans for January delivery gained as much as 24 cents, or 2.6 percent, to $9.57 a bushel and stood at $9.505 by 2:23 p.m. Singapore time. The contract has declined 42 percent from a record $16.3675 on July 3.

Corn gained 7.7 percent last week and soybeans 7.6 percent, the first such increase in five weeks. Corn lost 18 percent in October and soybeans 11 percent, the fourth straight monthly decline. The dollar rose 9.7 percent last month, the biggest monthly rally in 16 years.

The dollar fell as much as 1.3 percent to $1.2894 per euro and the MSCI Asia Pacific Index added 6.2 percent to 258.81. Crude oil climbed for a second day, with December delivery adding as much as 2 percent, to $69.19 a barrel.

Wheat for December delivery gained as much as 20.25 cents, or 3.8 percent, to $5.565 a bushel and was at $5.505 by 2:22 p.m. Singapore time. The contract is still down 59 percent from a record $13.495 on Feb. 27. The price plunged 21 percent in October, the biggest monthly decline since February 1986.

Wheat output in Australia, the world's sixth-largest exporter of the grain, may jump 50 percent this harvest 19.5 million tons, Commonwealth Bank of Australia predicted. That would allow for exports of 12 to 14 million tons, up on last year's 7.5 million tons, it said today.

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