Soybeans Gain as Crude Oil Rally, Dollar Decline Boost Outlook

By Luzi Ann Javier

Sept. 10 (Bloomberg) -- Soybeans advanced as rising crude oil prices and a decline in the dollar bolstered investors’ confidence in improved global commodity demand.

The oilseed gained as much as 0.6 percent after crude climbed for a fourth day on an industry report showing U.S. stockpiles dropped the most in a year last week. The dollar fell to its lowest in almost nine months against the euro, boosting the appeal of commodities priced in the U.S. currency.

“The oilseed market will remain reasonably supported until the first quarter of next year,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney. Oilseed and grain investors “will keenly watch the development in those outside markets, particularly the dollar and the oil market.”

Soybeans for November delivery climbed 0.5 percent to $9.3325 a bushel in after-hours electronic trading on the Chicago Board of Trade at 3:12 p.m. Singapore time.

The U.S. Department of Agriculture probably will forecast a record soybean harvest of 3.251 billion bushels, up 1.6 percent from its August estimate, according to the average estimate of 30 analysts in a Bloomberg News survey. The department’s next forecast is due Sept. 11.

Tight Supply

The record crop in the U.S., the world’s largest soybean grower and exporter, “cannot solve the global supply problem,” Oil World Executive Director Thomas Mielke said Sept. 7. Supply of 10 major oilseeds from September through February may fall by 5 million tons from a year earlier, he said.

“We’re likely to see prices supported between $8.50 and $9.50 until the South American harvest rolls through next year,” Commonwealth’s Mathews said.

Crude oil rose as much as 1.5 percent to $72.40 a barrel and last traded at $72.37. U.S. stockpiles fell by 7.22 million barrels in the week ended Sept. 4, the biggest weekly drop since Sept. 5, 2008, the American Petroleum Institute said yesterday.

Wheat for December delivery climbed as much as 0.6 percent to $4.5875 a bushel, its first gain in seven days. The most- actively traded contract was 0.4 percent higher at $4.58. December-delivery corn was at $3.115 a bushel, up 0.6 percent.

Wheat’s relative strength index, a measure of price momentum some investors use to determine if a commodity price is about to rise or drop, has been below 30 since Sept. 8. A reading below 30 is seen as a signal prices may gain.

“We’ve seen a continued slide in prices over the last month,” Mathews said. “The global supply-and-demand balance sheet is certainly depressing wheat prices.”

Australia, the world’s fourth-largest wheat exporter, will have “significant” quantities of the grain available for export, Agriculture Minister Tony Burke said today.

Wheat harvests in France, the European Union’s largest exporter, may rise 1.3 percent to 37.5 million tons this year, crops office FranceAgriMer said yesterday.

Inventories in Canada, the world’s second-largest wheat exporter, held 6.56 million metric tons on July 31, 49 percent more than a year earlier, Statistics Canada said yesterday.

To contact the reporter on this story: Luzi Ann Javier in Manila at ljavier@bloomberg.net