Corn, Soybeans Climb as Oil, Equity Rally Lifts Demand Outlook

By Jae Hur

Feb. 25 (Bloomberg) -- Corn and soybeans advanced for a third day on speculation that a rally in equity markets, the dollar’s decline and a rise in crude oil may boost demand prospects for food, animal feed and alternative fuel.

Asian stocks gained from a five-year low. U.S. stocks jumped the most in a month yesterday after Federal Reserve Chairman Ben S. Bernanke’s statement that banks need not be nationalized helped lift equities from their lowest valuations in two decades. The dollar fell 1.2 percent against the euro and oil gained 4 percent yesterday.

“Overall external factors, including stocks, the dollar and oil prices, lent support for the grains and oilseed complex,” Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today by phone.

Corn for March delivery rose 0.5 percent to $3.56 a bushel at 3:19 p.m. Singapore time in electronic trading after gaining 0.7 percent yesterday. The grain for May delivery also added 0.5 percent to $3.6475. Futures reached a record $7.9925 on June 27.

Soybeans for May delivery rose as much as 1.1 percent to $8.935 a bushel and last traded at $8.8725. The most-active contract still has declined 46 percent from a record $16.3675 on July 3.

The U.S. Department of Agriculture will release planting forecasts on Feb. 27, with estimates to be revised on March 31 after the government surveys farmers early next month.

Planting Forecasts

About 78.659 million acres will be planted with soybeans this year, up 3.9 percent from 75.718 million in 2008 and 6.3 percent more than the 74 million forecast on Feb. 12, according to the average estimate of 14 analysts surveyed by Bloomberg News. Corn acreage may fall 1 percent to 85.141 million from 85.982 planted last year and 88 million estimated on Feb. 12.

U.S. winter wheat was planted on 42.1 million acres from September to December, down 9.1 percent from 46.3 million acres a year earlier, the highest in a decade, the USDA said Jan. 12.

Wheat for May delivery was 0.6 percent higher at $5.295 a bushel at 3:14 p.m. Singapore time after gaining 0.9 percent yesterday. The price has dropped 61 percent from a record $13.495 in February 2008.

The MSCI Asia Pacific Index rose as much as 1.7 percent to 75.60 before trading at 75.56 at 3:23 p.m. Singapore time. The Standard & Poor’s 500 Index added 4 percent yesterday, the biggest rally since Jan. 21.

Crude oil was down 0.3 percent at $39.83 a barrel after closing at $39.96 yesterday. The dollar traded at $1.2859 per euro from $1.2846 late yesterday.

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