Soybeans Gain for Second Day as Dollar Lifts U.S. Crop Demand

By Jae Hur

July 31 (Bloomberg) -- Soybeans extended gains as the dollar’s decline increased demand prospects for supplies from the U.S., the top supplier.

The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, declined for a second day before a government report forecast to show the U.S. economic contraction slowed in the second quarter. A weaker dollar makes U.S. crops more attractive to buyers with other currencies.

“The dollar’s weakness may boost demand from overseas for U.S. crops that jumped in the past weeks,” Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today. The grain and oilseed market was also supported by rising global stock prices that increased optimism of an economic recovery, spurring demand for commodities, he said.

November-delivery soybeans climbed 0.4 percent to $9.745 a bushel on the Chicago Board of Trade at 12:05 p.m. Singapore time after jumping 6 percent yesterday, the most since Oct. 29. Even so, the oilseed is headed for a second monthly drop.

December-delivery corn fell 0.1 percent to $3.42 a bushel after rising 4.3 percent yesterday. Before today, the grain rose 4.6 percent this week, the first such gain in eight weeks.

Soybeans and corn jumped yesterday after the Department of Agriculture said U.S. exporters sold 1.92 million metric tons of soybeans to China, with 1.8 million tons set for delivery in the marketing year that begins Sept. 1

In a separate report yesterday, the USDA said soybean exports jumped 36 percent to 954,543 metric tons in the week ended July 23. Corn sales in the past four weeks have increased 55 percent from a year earlier, the USDA said.

Dollar Index

The Dollar Index slipped 0.3 percent to 79.04 after losing as much as 0.6 percent yesterday. The Reuters/Jefferies CRB Index of 19 commodities jumped 3.9 percent yesterday, the biggest gain since March 19.

The MSCI Asia Pacific Index climbed 1.5 percent to 111.59 as of 12:05 p.m. in Singapore. The benchmark has risen 8 percent for the month. The index has posted gains every month since March, the longest winning streak since July 2007.

Wheat for September delivery added 0.5 percent to $5.1875 a bushel after gaining 0.9 percent yesterday. Before today, the contract has dropped 4.5 percent this month on speculation favorable weather would boost U.S. production, touching touched $5.05 on July 29, the lowest price since March 4.

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