Corn, Soybeans Fall for Third Day as Slowing Growth Cuts Demand

By Jae Hur

Nov. 13 (Bloomberg) -- Corn and soybeans declined for a third day on speculation slower global economic growth will reduce demand for livestock feed and fuel made from the two biggest U.S. crops.

The MSCI Asia Pacific Index declined as much as 5.5 percent, losing for a third day, after U.S. stocks tumbled and oil plunged to a 21-month low as the U.S. Treasury scrapped plans to buy devalued mortgage assets. The dollar rose for a third day against the euro, eroding the appeal of U.S. supplies.

``The high volatility in stocks and currencies following the global financial crisis has depressed overall commodities,'' said Hiroaki Hama, an analyst at Mizuho Corporate Bank Ltd. in Tokyo. ``The dollar's strength versus the dollar also put pressure on grains, oil and other commodities.''

Corn for December delivery fell as much as 1.2 percent to $3.65 a bushel in after-hours electronic trading in Chicago and was at $3.6525 at 2:32 p.m. Singapore time. The price touched $3.6025 a bushel Nov. 11, the lowest since Oct. 25, 2007. Futures have fallen 54 percent from a record $7.9925 on June 27.

January-delivery soybeans declined as much as 1.6 percent to $8.81 a bushel and last traded at $8.855. The price fell to $8.38 on Oct. 16, the lowest since August 2007. Futures have lost 46 percent from a record $16.3675 on July 3.

China is buying at least 1.5 million metric tons of soybeans from local farmers, boosting rural incomes after much of the main producing region's harvest went unsold, two executives at state- owned companies said today. The 1.5 million tons, worth 5.6 billion yuan ($820 million), represents about 9 percent of the domestic crop.

Import Boost

Further purchases may boost China's imports as the state reserve absorbs domestic supply. China said Oct. 20 it would buy local soybeans to help shield farmers from losses after prices plunged. Dalian futures have dropped 39 percent from a record on July 3. The government didn't publicly announce its target volume.

Crude oil fell as much as 2.7 percent to $54.67 a barrel, the lowest since Jan. 30, 2007. It was last at $55.19 a barrel. Corn and soybeans are also used to make alternative fuels.

Wheat for December delivery was down 1.4 percent at $5.2575 a bushel at 2:29 p.m. in Singapore. The contract gained 1.9 percent yesterday after Syria said it is seeking 200,000 tons of the grain and Japan plans to buy 100,000 tons of U.S. grain. Wheat, which reached a record $13.495 on Feb. 27, touched $4.965 on Oct. 24, the lowest since June 2007.

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