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Soybeans Advance to Two-Year High as Dollar Weakens on Easing

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Nov. 5 (Bloomberg) -- Soybeans gained for a third day to a two-year high on prospects for further weakness in the dollar after the Federal Reserve announced plans expand stimulus, boosting demand for commodities as an alternative investments.

The oilseed for January delivery climbed as much as 1.2 percent to $12.895 a bushel, the highest level since Sept. 3, 2008, on the Chicago Board of Trade and traded at $12.8875 at 10:41 a.m. in Tokyo. The contract is set for a fifth weekly gain, the longest winning streak since the six weeks to June 5, 2009.

“The dollar’s weakness has sent most commodities higher,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo. The oilseed market has also been supported by Chinese demand, he said.

The Fed said on Nov. 3 that it will buy an additional $600 billion of Treasuries through June and keep interest rates low for an “extended period.” The Dollar Index was little changed at 75.904 today after declining to an 11-month low yesterday.

The Standard & Poor’s GSCI Index of 24 commodities rose yesterday to the highest level since Oct. 3, 2008. Soybeans have gained 43 percent since the end of June and corn has jumped 58 percent on reduced global production.

Corn for December delivery declined as much as 0.3 percent to $5.88 a bushel. The price touched $5.9575 yesterday, the highest level since Aug. 29, 2008.

Corn Harvest

The corn harvest will be 12.521 billion bushels, less than the 12.664 billion forecast by the USDA last month, the Linn Group said yesterday. The soybean crop will be 3.483 billion bushels, more than the agency forecast of 3.408 billion, the research and brokerage firm said. The government will update its forecasts on Nov. 9.

Wheat for December delivery rose as much as 1.3 percent to $7.23 a bushel, and last traded at $7.20. The grain has surged 50 percent since the end of June after drought destroyed Russian crops, prompting the country to ban exports.

Rough-rice for January delivery gained 0.7 percent to $14.965 per 100 pounds. On Oct. 28, the contract touched $15.27, the highest level since Jan. 4. The price has risen 1.6 percent this week, gaining for an 11th straight week. Rice has jumped 55 percent since the end of June as flooding damaged crops in Thailand and Vietnam, the world’s two biggest exporters.

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

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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