Corn, Soybeans Fall as Stocks Dip Raises Growth, Demand Concern

By Jae Hur

Nov. 20 (Bloomberg) -- Corn and soybeans dropped for a third day as stock markets slumped, increasing concern that a worsening global economy will curb demand prospects for food, feed and fuel. Wheat prices declined for a fourth day.

Asian stocks fell, extending a global rout, as U.S. consumer prices dropped by a record and Japan's exports declined the most in six years, adding to evidence a global recession is deepening. Corn has fallen 53 percent from its record in June and soybeans have lost 46 percent from an all-time high in July.

``Pessimism over the global economic outlook as indicated by the fresh bear market lows in the U.S. equity markets is pushing grains markets lower,'' said Toby Hassall, a research analyst with Commodity Warrants Australia in Sydney.

Corn for December delivery fell as much as 2.1 percent to $3.7075 a bushel in after-hours trading in Chicago and was at $3.735 at 10:28 a.m. Singapore time. The price touched a record $7.9925 on June 27.

Soybeans for January delivery dropped as much as 2.3 percent to $8.7625 a bushel and stood at $8.87 at 10:30 a.m. Singapore time. Most-active futures reached a record $16.3675 on July 3.

The dollar was little changed at $1.2511 per euro after gaining 1 percent yesterday. Crude oil for December delivery fell as much as 1.3 percent to $52.90 a barrel after touching $52.79 a barrel, the lowest since Jan. 23, 2007.

``A stronger dollar is also contributing to the weakness in grains prices,'' Hassall said. ``Both soy and corn should derive a degree of support from unfavourable weather conditions in Argentina.''

`Cold Winter'

The MSCI Asia Pacific Index lost as much as 3.7 percent to 76.27, dropping for a fourth day. The UBS Bloomberg Constant Maturity Commodity Index fell 1.1 percent to 900.86, the lowest since Sept. 26, 2003, as the global recession eroded demand for energy, metals and crops.

``No one can see the light at the end of the tunnel,'' Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today by phone. ``For investment sentiment, it's like we are still in the very cold winter.''

Wheat for March delivery declined as much as 1.3 percent to $5.395 a bushel and was $5.4125 at 10:44 a.m. Singapore time. Futures have fallen 60 percent from a record $13.495 on Feb. 27, partly because global growers increased planting to exploit prices that rose 77 percent in 2007.

In the export market, Japan is seeking to buy 91,000 tons of U.S. milling wheat at a tender today and Egypt plans to buy at least 55,000 tons of the grain.

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