Corn, Soybeans Decline as Investors Lock in Gains, Oil Slumps

By Luzi Ann Javier

Nov. 10 (Bloomberg) -- Corn, soybeans and wheat declined on speculation some investors may be locking in gains after prices jumped in Chicago yesterday and as crude oil dropped, reducing the appeal of crops processed to make biofuels.

Corn rose 5.2 percent yesterday, the steepest gain since Oct. 12, while wheat had the strongest advance in more than two weeks and soybeans had the biggest rise in a week as the dollar plunged to a 15-month low against a basket of six major currencies and gold climbed to a record. Crude oil futures fell as much as 0.7 percent today after closing 2.6 percent higher yesterday in New York.

“You’d have some profit-taking following those gains overnight,” Toby Hassall, a research analyst at CWA Global Markets Pty said by phone from Sydney. “Oil prices are slightly weaker today, which can have an impact on the grain markets.”

December-delivery corn, which can be processed to make ethanol, lost as much as 1.7 percent to $3.795 a bushel on the Chicago Board of Trade. The most-active contract traded at $3.8125 a bushel, down 1.2 percent, at 2:23 p.m. Singapore time.

Wheat for December delivery last traded 1.1 percent lower at $5.1425 a bushel after surging as much as 5.4 percent yesterday. Soybeans for January delivery dropped 0.4 percent to $9.6825 a bushel. The contract closed 1.8 percent higher yesterday.

Futures also fell on speculation the U.S. Department of Agriculture may leave unchanged its estimates for soybean and corn output, Hassall said.

U.S. Forecasts

The USDA in October forecast U.S. soybean output would rise to a record 3.25 billion bushels, higher than 3.245 billion bushels estimated a month earlier. It also increased its U.S. corn output estimate to 13.018 billion bushels, the second- largest on record, from 12.955 billion bushels in September.

The department’s latest estimates for U.S. and global production and demand for soybeans, corn, wheat and rice are scheduled for release in Washington later today.

The average estimate among 28 analysts surveyed by Bloomberg News was for a corn crop of 12.962 billion bushels and a soybean harvest of 3.262 billion bushels.

Rice for January delivery was little changed at $15.205 per 100 pounds in after-hours electronic trading, after jumping as much as 1.4 percent yesterday.

Prices may gain on concern global output will fall behind demand after drought in India and crop damage from storms in the Philippines, Jonathan Barratt, managing director at Commodity Broking Services Pty said by phone from Sydney today.

State-run companies in India got bids for 30,000 tons of imported rice at three tenders yesterday, while the Philippines, the world’s biggest importer, issued a notice seeking 600,000 tons of the grain in the nation’s biggest tender ever.

“When you look at the market now and how it’s digesting the information, it sort of still wants to trade higher,” Barratt said. Futures may rise to around $16 per 100 pounds in Chicago on concerns that supply is declining, he said.

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