By Jae Hur and Sungwoo Park
Nov. 7 (Bloomberg) -- Soybeans gained for a second day on speculation production will drop next year in Brazil, the world’s second-largest producer of the oilseed, boosting demand for U.S. exports. Corn and wheat advanced for the first time in three days.
Soybean output in Brazil will fall to between 58.4 million and 59.3 million metric tons, compared with 60 million tons this year, the Agriculture Ministry’s crop-forecasting agency said yesterday. The agency, known as Conab, last month forecast output to rise to between 60.1 million and 61.3 million tons.
“The forecast for Brazil’s production definitely helped boost soybean prices,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd. in Tokyo, said today by phone. “But a weaker tone in stock markets may limit gains in soybean prices.”
Soybeans for January delivery added as much as 13.75 cents, or 1.5 percent, to $9.1975 a bushel in electronic trading in Chicago and were at $9.18 by 2:07 p.m. Singapore time. The contract has declined 44 percent from a record $16.3675 on July 3.
The U.S. Department of Agriculture estimated the Brazil soybean crop at 62.5 million tons on Oct. 10.
Corn for December delivery gained as much as 7.5 cents, or 2 percent, to $3.855 a bushel and last traded at $3.83. The price lost 3.1 percent yesterday after trading as low as $3.745, the lowest since touching a one-year low at $3.64 on Oct. 27. Futures have declined 52 percent from a record $7.9925 on June 27.
Corn
Corn production will fall to 54.3 million to 55.2 million tons, from 58.6 million tons, Conab said. That compares with the October estimate for a drop to 55 million to 56 million tons.
The USDA on Nov. 10 will project a U.S. soybean crop of 2.915 billion bushels, according to the average estimate of 21 analysts surveyed. That’s down 0.5 percent from the agency’s Oct. 28 forecast of 2.938 billion and 8.9 percent bigger than the harvest in 2007 when farmers planted 17 percent more acres with the oilseed.
The corn crop will total 12.07 billion bushels, according to the survey, compared with the USDA’s forecast for 12.033 billion bushels on Oct. 28. Last year’s harvest was a record 13.074 billion bushels after farmers increased planted acreage to a 63- year high.
Stocks Decline
The MSCI Asia Pacific Index fell as much as 4 percent to 85.08 after U.S. stocks tumbled in the market’s biggest two-day slump since 1987. Crude oil rebounded from a 19-month low as traders bought back contracts to benefit from earlier bets on falling prices. The dollar fell as much as 0.5 percent to $1.2783 per euro after gaining 1.9 percent yesterday.
Wheat for December delivery was up 4.25 cents, or 0.8 percent, at $5.2675 a bushel as of 2:18 p.m. Singapore time after trading between $5.1725 and $5.28. Futures, which fell 2.8 percent yesterday, are down 61 percent from a record $13.495 on Feb. 27.
Japan, Asia’s largest wheat importer, didn’t buy any of the grain from the U.S. in October as a Japanese trading company defaulted on sales of 20,000 metric tons to the government after the start of tougher food safety rules.
The company failed to sign a contract for 12,000 tons of dark northern spring wheat and 8,000 tons of western white wheat, that it had agreed to sell at a tender Oct. 16, Tatsuya Kajishima, director at the grain trade division of the Ministry of Agriculture, Forestry and Fisheries, said today by phone. He declined to name the company or give further details.
To contact the reporters on this story: Sungwoo Park in Seoul at spark47@bloomberg.net; Jae Hur in Singapore at jhur1@bloomberg.net
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