Corn futures rose for the third straight session after U.S. lawmakers passed a bill averting spending cuts and tax increases that threatened a recovery in the U.S., the world’s biggest grain consumer. Soybeans dropped.
The Standard & Poor’s GSCI Index of 24 raw materials jumped as much as 1.6 percent, and equities gained. The dollar was little changed after falling as much as 0.6 against a basket of currencies, increasing the appeal of exports from the U.S., the top shipper. Corn fell 13 percent in the five months ended Dec. 31 as overseas demand ebbed.
“There’s some bargain buying with higher stocks and a weaker dollar,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The markets are looking at the end of a deflationary cycle and starting to think long term about easy monetary policy in the U.S. leading to general commodity inflation.”
Corn futures for March delivery rose 0.3 percent to $7.0025 a bushel at 10:28 a.m. on the Chicago Board of Trade, heading for the longest rally since late November. Last year, the most-active contract gained 8 percent, the fourth straight increase, after a drought cut U.S. production.
Prices pared earlier gains on speculation that South America will harvest record crops this year, Grow said. Rain in the next two weeks may boost yield potential in Brazil, while dry weather firms muddy soils for Argentine farmers to finish planting corn and soybeans, World Weather Inc. said in a report.
Soybean futures for March delivery fell 0.4 percent to $14.035 a bushel. Earlier, the price touched $13.9625, the lowest since Nov. 20. In 2012, the oilseed advanced 17 percent.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.