Wheat Rallies on Egypt Purchase, Soybeans Head for Weekly Gain

By Jae Hur

Nov. 28 (Bloomberg) -- Wheat advanced for a second day on speculation that rising demand for food-quality grain will revive U.S. exports. Corn also rose while soybeans were heading for the first weekly gain in four weeks.

Egypt, the world’s largest wheat importer, agreed to buy 55,000 metric tons of U.S. grain yesterday. Buyers, including Egypt, had purchased low-cost, feed-quality grain from countries such as Ukraine and Russia, driving U.S. shipments down 14 percent from June 1 to Nov. 13 compared with a year earlier.

“Egypt’s purchase was supportive to U.S. grain,” Kenji Kobayashi, an analyst at Kanetsu Asset Management Co. in Tokyo, said today by telephone.

Wheat for March delivery gained as much as 2 percent to $5.65 a bushel in after-hours Chicago trading and was at $5.575 by 11:39 a.m. Singapore time. Before today the price rose 7 percent this week and 3.3 percent this month, heading for the first monthly gain since August. Futures are still 59 percent below a record $13.495 reached on Feb. 27.

Demand for wheat to make staple foods such as bread and pasta probably will climb, analysts said.

The dollar headed for its biggest weekly decline in almost three years against the euro on speculation policy makers’ steps to spur growth and lending will reduce demand for the relative safety of U.S. assets.

The U.S. currency traded at $1.2907 per euro as of 10:29 a.m. in Singapore, compared with $1.2904 yesterday and down 2.5 percent from Nov. 21, the biggest weekly drop since January 2006. The dollar’s weakness boosts interest in U.S. supplies from overseas buyers holding other currencies.

Corn Rises

Corn for December delivery rose as much as 1.4 percent to $3.59 a bushel and stood at $3.5475 by 11:32 a.m. Singapore time. Before today the price fell 12 percent this month, heading for a fifth straight monthly decline. Futures reached a record $7.9925 on June 27.

Soybeans for January delivery were up 0.1 percent at $8.87 a bushel at 11:30 a.m. in Singapore after trading as high as $8.9575. Before today the price gained 5.5 percent this week, the first such advance in four weeks. Futures reached a record $16.3675 on July 3.

Corn and soybeans rose on Nov. 26 after China, the world’s biggest oilseed importer and pork producer, slashed interest rates to spur its economy, reviving prospects for an increase in demand for livestock feed and vegetable oil. U.S. grain markets in Chicago were closed yesterday for the Thanksgiving holiday.

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