Soybeans extend gains as higher oil may increase biofuel demand

Soybeans advanced for a second day on speculation that higher crude oil prices may lift demand for their use in alternative fuels. Corn was little changed.

Oil also advanced for a second day after an industry-funded report showed a decline in crude and fuel product supplies in the US, increasing demand for corn and soybeans for use in biofuel. Corn in Chicago yesterday gained 2.2 per cent, the most in almost two weeks, and soybeans climbed 0.8 per cent. “Higher oil prices have lent support to corn and soybeans amid strong demand prospects in China,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co. Soybeans for July delivery rose 0.4 per cent to $9.9775 a bushel on the Chicago Board of Trade at 2:07 pm Tokyo time. Corn for July delivery was little changed at $3.655 a bushel. Crude oil for June delivery rose as much as 0.7 per cent to $84.45 a barrel in New York before trading at $84.44. Oil gained after the American Petroleum Institute said crude inventories declined 741,000 barrels and distillate fuel, a category that includes heating oil and diesel, fell 3.1 million barrels.