Corn, Soybeans Rise on Signs of Higher Fuel Demand; Wheat Gains

Corn prices jumped to a five-week high and soybeans rose as gasoline costs climbed, enhancing the appeal of fuels refined from grain and oilseeds. Wheat rebounded as speculators unwound bets that futures will fall.

Gasoline prices rose to a five-week high, signaling more demand for corn-based ethanol and biodiesel made from soybeans. Corn has dropped 7.7 percent this year and soybeans are down 7.6 percent as output climbed in the U.S., the world’s biggest producer and exporter.

“We’re seeing the outside markets have an influence” on prices, said Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas. “We’ve got the energy markets up, and people are saying the lows might be in.”

Corn futures for May delivery rose 11 cents, or 3 percent, to $3.8275 a bushel on the Chicago Board of Trade. Earlier, the price reached $3.8775, the highest level for a most-active contract since Jan. 12. Soybean futures for May delivery climbed 14.5 cents, or 1.5 percent, to $9.69 a bushel.

Wheat futures rose 11.25 cents, or 2.2 percent, to $5.1525 a bushel. Earlier, the price fell as much as 1 percent.

“The funds are short wheat, corn and soybeans, so that’s keeping me on my toes,” Leffler said.

Wheat has dropped 4.8 percent this year on rising global inventories. Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government figures show. Wheat, at $10.6 billion, is fourth behind hay.

Tony C. Dreibus
Bloomberg