Soybeans Rise as Dollar Drop Boosts Investment Appeal of Crop

May 10 (Bloomberg) -- Soybeans rose for a second session as a package of rescue loans in Europe eroded the value of the dollar and eased concern that economic growth will slow, boosting prospects for exports of the U.S. crop.

U.S. stocks surged the most in 12 months and the dollar plunged against a basket of six major currencies after the European Union agreed to almost $1 trillion in loans to prevent a global debt crisis. The Reuters/Jefferies CRB Index of 19 raw materials gained 1.6 percent to 265.44, its biggest increase since March 29.

“The dollar’s retreat is a sign that the fears of a global collapse have abated,” said Greg Grow, the director of agribusiness for Archer Financial Services in Chicago. The European bailout revived “the equity and commodity markets and reduced the concerns about an economic slowdown,” he said.

Soybean futures for July delivery rose 1 cent, or 0.1 percent, to $9.61 a bushel on the Chicago Board of Trade, capping the first two-day advance this month. The commodity fell 3.9 percent last week, the biggest weekly decline since the end of January on speculation the Greek crisis would reduce demand for the oilseed.

Prices also rose after government reports showed increased demand for U.S. supplies from China, the world’s biggest buyer of soybeans and second-largest consumer of corn, Grow said.

Chinese Demand

Soybean imports by China climbed 10 percent to 15.2 million tons in the first four months from a year earlier, according to customs figures. Imports in April were 4.2 million tons, up from 3.7 million tons a year earlier.

Soybean exports for delivery before Sept. 1 doubled in the week ending April 29 from the previous week and were 47 percent above the average of the prior four weeks, U.S. Department of Agriculture data show. China bought 180,000 tons for this year and another 168,000 tons for delivery after Sept. 1.

“Demand is improving,” because prices are at the low end of the average the past three years, Grow said.

The soybean crop in the U.S. was valued at $31.8 billion last year, second only to corn at $48.6 billion, government figures show.