By Jae Hur
Nov. 21 (Bloomberg) -- Corn and soybeans extended losses as equity markets plunged, increasing speculation that a worsening global economy will reduce demand for food, animal feed and alternative fuels. Wheat was unchanged, paring early declines.
Corn has fallen 55 percent from its record in June and soybeans have lost 48 percent from an all-time high in July. Asian stocks rose for the first time this week and oil rebounded from near the lowest level since May 2005, reversing their early losses after the Standard & Poor's 500 Index yesterday plunged to its lowest level in 11 years.
``It's a reflection of what's happening in stock markets,'' said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo. ``All eyes are now on stocks.''
Corn for December delivery fell as much as 3.4 percent to $3.515 a bushel, the lowest since Oct. 15 2007, in after-hours trading in Chicago and was at $3.57 at 2:16 p.m. Singapore time. The price, which touched a record $7.9925 on June 27, has lost 6.8 percent this week.
Soybeans for January delivery dropped as much as 2.4 percent to $8.3525 a bushel, the lowest since Aug. 23, 2007, and stood at $8.505 at 2:18 p.m. time. Most-active futures, which reached a record $16.3675 on July 3, have fallen 6.1 percent this week, losing for the third-straight week.
Wheat for March delivery was unchanged at $5.31 a bushel by 2:16 p.m. time after dipping to $5.1925 in early trade. The price has dropped 7.6 percent this week. Futures have fallen 61 percent from a record $13.495 on Feb. 27.
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The MSCI Asia Pacific Index advanced 3.2 percent to 77.56, erasing a 2.3 percent retreat. U.S. stocks slid after economic reports depicted a deepening recession and lawmakers postponed a vote on a plan to salvage the auto industry.
Crude oil for January delivery fell to as low as $48.25 a barrel, the lowest since May 23, 2005, and was $50.12 by 2:28 p.m. Singapore time. The UBS Bloomberg Constant Maturity Commodity Index plunged 3.9 percent to 865.64, the lowest since Dec. 23, 2005.
China may buy at least 10 million tons of corn from local farmers to revive prices and boost rural incomes, two executives at state-owned companies said.
The purchases would double earlier plans to buy 5 million tons, said the executives, who declined to be identified as state reserve actions are considered secret. The corn would be worth 15 billion yuan ($2.2 billion) and represent about 6 percent of the forecast total crop.
Argentina wheat farmers will harvest 38 percent less of the grain than a year earlier after dry conditions and freezing weather last week, the government said. Production will fall to 10.1 million tons during the harvest from now through January, compared with 16.3 million tons a year earlier, the Agriculture Secretariat said yesterday.
To contact the reporter for this story: Jae Hur in Singapore at jhur1@bloomberg.net
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