By Luzi Ann Javier
Oct. 15 (Bloomberg) -- Soybeans rose for a second day as U.S. harvesting delays raised the risk the world’s largest exporter may miss a record output forecast and as a weaker dollar made commodities more attractive to investors.
Cooler, wet weather forecast for the Midwest, the largest U.S. growing region, may create “generally difficult harvest conditions” after heavy rainfall on Oct. 13, DTN Meteorlogix LLC said yesterday.
“Frost and the delay in harvests are all going to push prices higher,” Peter McGuire, managing director of CWA Global Markets Pty in Sydney, said by phone today. “All the soft markets have had a strong rally and that could continue.”
Soybean futures jumped 7.6 percent this month as freezing weather delayed harvest. The November-delivery contract added as much as 0.5 percent to $9.99 a bushel in after-hours electronic trading and was at $9.97 at 1:31 p.m. Singapore time.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the value of the greenback against the currencies of six major U.S. trading partners, fell for a fourth straight session amid speculation the Federal Reserve won’t raise interest rates for some time. The index was at 75.279, down 0.4 percent.
About 23 percent of the soybean crop in the 18 largest U.S. producing states had been harvested as of Oct. 11, compared with 49 percent a year earlier and the past five-year average of 57 percent, the Department of Agriculture said Oct. 13. About 13 percent of the corn crop was collected, compared with 20 percent a year ago and the average 35 percent in the past five years.
Soybean Production
The USDA forecast Oct. 9 that the soybean crop would rise 9.5 percent to a record 3.25 billion bushels in the marketing year that began Sept. 1, and the corn crop would be 13.018 billion bushels, the second-largest on record. Investors are pricing in the risk that harvests may be smaller than expected, McGuire said.
Corn for December delivery fell as much as 0.9 percent to $3.7950 a bushel and last traded at $3.8275. The most-active contract has gained 11 percent this month.
The grain’s relative strength index, a momentum measure used by some investors to determine if price are about to rise or fall, has been above 72 since Oct. 12. A reading of more than 70 is seen by some investors as a signal prices may fall.
Wheat for December delivery fell 0.6 percent to $5.0975 a bushel. The most-active contract has jumped 11 percent this month, after four straight monthly declines.
Corn and wheat “have run up a bit the last few days on short covering and a weak U.S. dollar, but the fundamentals still remain weak,” Ben Barber, a futures adviser at Bell Commodities Ltd. in Melbourne said in an e-mail.
The USDA on Oct. 9 raised its estimate for global wheat stockpiles at the end of the 2009-2010 marketing year to 186.7 million tons, compared with 166.8 million tons a year earlier.
The agency forecast global corn output forecast at 792.5 million tons, from 791.3 million tons a year earlier.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
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