Corn, Soybeans Climb as Dollar Drop, Oil Gain May Raise Demand

By Jae Hur

Jan. 21 (Bloomberg) -- Corn and soybeans advanced as the dollar’s rally stalled and crude oil rebounded, boosting demand prospects for the crops for food, animal feed and alternative fuel. Wheat also gained.

The dollar declined against a weighted basket of six major currencies, limiting the purchasing power of importers of U.S. goods. Crude oil rose as much as 1.6 percent. Corn and soybeans are used to produce biofuels.

“The gains in corn and soybeans are mainly a technical rebound,” Tomokazu Amano, research team chief at Mitsubishi Corp. Futures & Securities Ltd. in Tokyo, said. “We saw some selling interest above $10 a bushel for soybeans and $4 for corn.”

Corn for March delivery was 0.7 percent higher at $3.86 a bushel in Chicago trading at 2:24 p.m. in Singapore after trading between $3.815 and $3.865. The contract fell 2 percent yesterday. The price has fallen 52 percent from a record $7.9925 in June.

Soybeans for March delivery were up 0.6 percent at $9.98 a bushel after losing 2.8 percent yesterday. The oilseed is down 39 percent from a record $16.3675 on July 3.

“The dollar will set the direction for grains and other commodities with easing concern that dry weather will damage crops in South America,” Amano said. “Steady demand from China will also lend support to soybeans.”

Dollar Falls

The dollar fell as much as 0.9 percent against the euro, declining for the first time in three days, after touching $1.2845, the highest since Dec. 9. Crude oil for March delivery rose as much as 66 cents to $41.50 a barrel in electronic trading on the New York Mercantile Exchange. It was at $40.74 a barrel at 2:27 p.m. Singapore time.

Wheat for March delivery rose as much as 1.1 percent to $5.56 a bushel and last traded at $5.56. The contract dropped 4.9 percent yesterday. The price has tumbled 59 percent from a record $13.495 on Feb. 27.

In the export market, Egypt is seeking to buy at least 55,000 tons of wheat today. Japan plans to buy 157,000 tons of the grain tomorrow, including 90,000 tons from the U.S. South Korea is seeking to buy a total of 146,000 tons of soybean meal today.

Pakistan yesterday delayed awarding a contract to import 250,000 metric tons of U.S. wheat for the second time in two weeks. Bids for white wheat will be opened Jan. 31 instead of Jan. 24, the state-owned Trading Corp. of Pakistan said on its Web site.

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