Corn, Soybeans Rise as Record Prices Fail to Slow Consumption
Corn and soybeans rose on signs that
declining shipping costs and a falling dollar are boosting
overseas demand for supplies from the U.S., even after prices
reached a record last month.
Corn exports by the U.S., the worlds largest producer, are
up 33 percent from a year earlier in the marketing year that
began Sept. 1, compared with U.S. Department of Agriculture
forecasting sales up 15 percent for the entire year. Soybean
sales are up 0.8 percent, defying a USDA forecast for decline of
11 percent for the marketing year.
“The market keeps waiting for high prices to slow down
demand, and its not happening, said Craig Dubbs, a market
analyst for Rand Financial Services Inc. in Chicago. “It looks
like USDA has underestimated U.S. export sales.
Corn futures for March delivery rose 5.5 cents, or 1.1
percent, to $5.0675 a bushel 9:40 a.m. on the Chicago Board of
Trade. Most-active futures gained 10 percent in January, a fifth
straight monthly gain, and reached a record $5.1925 on Jan. 15.
Corn rose 17 percent last year after on record demand for grain
used to produce ethanol and feed livestock.
Soybean futures for March delivery rose 14.25 cents, or 1.1
percent, to $12.8875 a bushel in Chicago. Most-active futures
gained 5 percent in January, the sixth straight monthly
increase, and reached a record $13.415 on Jan. 14. Soybeans
rallied 78 percent last year as U.S. farmers planted the fewest
acres in 12 years.
The U.S. is the biggest producer and exporter of soybeans.
Shipping Costs, Dollar
The Baltic Dry Index of shipping costs for commodities has
dropped 40 percent in the past two months and the dollar lost 11
percent in the past year against six major currencies.
The UBS Bloomberg Constant Maturity Commodity Index of 26
raw materials rose as much as 0.6 percent earlier today to a
record 1,356.994 in New York. The index gained 5.7 percent in
January, the biggest rise since September, on speculation the
Federal Reserves rate cuts the past two weeks will spur global
inflation and boost demand for commodities.
Corn is the biggest U.S. crop, valued at a record $33.8
billion in 2006, with soybeans in second place at $19.7 billion,
government figures show.
