Corn, Soybeans Rise on `Buying Panic’ to Avoid Food Shortages

Corn and soybeans rose for a second straight day on speculation global demand will increase as nations seek to slow inflation and avoid food shortages.

The Philippines, the biggest rice importer, yesterday urged Asian nations to convene an emergency meeting on the region’s food crisis. Kazakhstan, the world’s fifth-largest wheat exporter, banned shipments of the grain until Sept. 1 to control domestic prices for bread and other foods. Wheat and rice prices have doubled to records in the past year.

“Countries are in a buying panic about corn and soybeans,” said Mark Schultz, a vice president for Northstar Commodity Investments in Minneapolis. “If there is any global weather problem this year, corn and soybeans will be substantially higher than they are today. No one wants to suffer a food shortage.”

Corn and soybeans rose as energy costs climbed, signaling demand for biofuels will increase. Crude oil and gasoline futures rose to records today.

“The rally in crude oil is driving inflation and speculator demand for commodities,” said Jerry Gidel, a market analyst at North American Risk Management Services Inc. in Chicago. “Crude-oil gains are boosting ethanol margins and production.”

Bloomberg