Corn and soy prices increased on speculations that US farmers are withholding their new crop amid low prices.

Soy for January delivery increased 1.4 percent to US$9.0875 per bushel in after-hours trading in Chicago, and traded at US$9.05 at 10.44 am Singapore time. The price fell 2.7 percent last week, the sixth decline in the past seven weeks.

Corn for December delivery inched up 1.1 percent to US$3.8425 per bushel and reached US$3.8325 at 10.48 am Singapore time. Corn increased 1.3 percent last week, the second time in three weeks. The price on Tuesday (November 11, 2008) fell to a new low of US$3.6025.

Wheat for March delivery climbed 2.2 percent to US$5.87 per bushel and was at US$5.8175 at 10.51 am in Singapore time. The price rose 10 percent last week, as Japan imported its first batch of US wheat in two months and dry weather in Australia diminished harvest prospects. Argentina's annual wheat output may also fall 36 percent to 10.5 million tonnes, said the Buenos Aires Cereals Exchange in a report on Friday (November 14, 2008).

Soy fell to a 14-month low in Chicago on October 16 and corn slipped to its lowest point in more than a year on November 11, as investors sought cash amid the global credit crunch while slowing economies worry on possible decline in demand.

Farmers are expecting that the current price is the low for the year, and it is hoped that soy prices will increase from now until spring, said Mark Pietz, competitiveness chair at the United Soybean Board.

Variable production costs rose 27 percent to US$140 per acre this year as oil rallied and will likely increase 14 percent next year as the fall in crude prices will not be immediately reflected in fertiliser and chemicals, Pietz said.

Seed costs will also increase, while soy consumption will increase next year even if the growth rate shrinks, Pietz added.