Soybeans rose to a two-week high on speculation that commodity demand will increase as low interest rates bolster prospects for economies. Corn pared gains as U.S. farmers increased sales.
The Standard & Poor’s GSCI Spot (SPGSCI) Index of 24 raw materials climbed as much as 1.5 percent, while the dollar fell to a six- week low against a basket of six currencies. Yesterday, the Federal Reserve said its benchmark rate probably will stay close to zero percent at least until late 2014. Brazil’s central bank said that there is a “high” chance its key rate will decline.
“There is a tailwind behind the commodity markets because of the central banks’ efforts to boost economic growth,” Jim Gerlach, the president of A/C Trading Co. in Fowler, Indiana, said in a telephone interview. “The dollar’s drop is attracting new speculative investment.”
Soybean futures for March delivery rose 0.8 percent to close at $12.2275 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price reached $12.31, the highest for a most-active contract since Jan. 11.
Corn futures for March delivery were unchanged at $6.345 a bushel. Farmers boosted sales from inventories after the grain climbed as much as 1.8 percent to a two-week high of $6.4575.
Earlier this month, growers withheld grain as prices tumbled after the government said last year’s harvest topped estimates and stockpiles were larger than forecast, Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview.
The price gained 6.9 percent in the previous five sessions on speculation that dry weather will reduce South American yields, increasing demand for U.S. supplies.
The U.S. was the world’s largest exporter of both commodities in the year that ended Sept. 30, according to government estimates. Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion.
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