May 8 (Bloomberg) -- Corn and soybeans rose, capping a second straight week of gains, on speculation that the worst of the recession is over and that demand will improve for crops used in food, animal feed and biofuels.
U.S. payrolls shrank by 539,000 in April, after a 699,000 loss in March, the Labor Department said today in Washington. Analysts expected a drop of 600,000, based on a Bloomberg News survey. U.S. exporters reported sales of 296,000 metric tons of corn to unknown destinations, the Department of Agriculture said today. U.S. soybean sales since Sept. 1 are at a record level, 12 percent higher than a year earlier, the USDA said yesterday.
“Fewer job cuts signal the economy is bottoming, and that is bullish,” said Jerry Gidel, a market analyst at North American Risk Management Services Inc. in Chicago. “Soybean demand is fantastic, and corn demand is improving.”
Corn futures for July delivery rose 9 cents, or 2.2 percent, to $4.21 a bushel on the Chicago Board of Trade, after touching a four-month high of $4.2125. The price gained 1.8 percent for the week.
Soybean futures for July delivery rose 9.5 cents, or 0.9 percent, to $11.115 a bushel in Chicago. The price gained 1.9 percent this week, capping the fifth advance in six weeks. Yesterday, futures reached $11.31, the highest since Sept. 29.
The U.S. is the world’s biggest producer and exporter of both crops. Prices also rose today after Federal Reserve Chairman Ben S. Bernanke said results of the government’s review of the health of the banking industry “should provide considerable comfort.” The Standard & Poor’s 500 Index rose as much as 2.5 percent and headed for an eighth weekly gain in the past nine.
Commodity Rally
The Reuters/Jeffries CRB Index of 19 commodities, which includes corn and soybeans, rose to a four-month high after the dollar dropped to a one-month low against the euro, bolstering the appeal of raw materials as an alternative investment. The dollar lost as much as 1.8 percent versus the euro, falling to the weakest level since March 26.
“The banks passed the stress test and that is helping to bring new investment money into the stock and commodity markets,” said Mark Schultz, a vice president for Northstar Commodity Investments Inc. in Minneapolis. “The story is all about an improvement in sentiment about the economy.”
Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, with soybeans in second place at a record $27.4 billion, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
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