Corn, Soybeans Jump on Dollar, Crude Oil Ahead Of USDA Report

By Jae Hur

Nov. 10 (Bloomberg) -- Corn and soybeans rose as the dollar fell against the euro and crude oil jumped after China announced an economic stimulus plan that may spur economic growth ahead of a monthly U.S. crop report.

The dollar fell as much as 1.4 percent against the euro and oil gained as much as 5.3 percent today, after losing 10 percent last week, on speculation China's $586 billion economic package may boost demand for fuel. The U.S. Department of Agriculture is scheduled to release its fourth survey-based production forecasts for corn and soybeans today at 8:30 a.m. in Washington.

``The dollar's strength and crude oil's gain lent support to grains,'' Kenji Kobayashi, an analyst at Kanetsu Asset Management Co. in Tokyo, said today. ``The market expects the U.S. government to revise its forecast for soybean crop yields lower in today's report.''

Corn for December delivery rose as much as 14.5 cents, or 3.9 percent, to $3.90 a bushel in electronic trading in Chicago and stood at $3.825 by 2:45 p.m. Singapore time. Futures are still 52 percent lower than a record $7.9925 on June 27.

Soybeans for January delivery added as much as 33.25 cents, or 3.6 percent, to $9.5425 a bushel and last traded at $9.4525. Futures have declined 42 percent from a record $16.3675 on July 3.

Crude oil and gold rose for a second day and Asian stocks rallied for the first time in three days after China announced the plan, which will go toward low-rent housing, infrastructure in rural areas, as well as roads, railways and airports. The MSCI Asia Pacific Index gained 3.5 percent to 90.28.

``The announcement of China's economic stimulus package is boosting commodities across the board today by allaying fears of a severe global downturn,'' said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney.

Wheat for December delivery gained as much as 15.25 cents, or 2.9 percent, to $5.3625 a bushel and traded at $5.33 as of 2:47 p.m. Singapore. Futures are down 61 percent from a record $13.495 on Feb. 27.

Worldwide output may be forecast to beat an October estimate on Nov. 10, when the USDA issues new crop projections, analysts said. Last month, the U.S. government said farmers will collect a record 680.2 million metric tons in the year ending May 31.

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