By Luzi Ann Javier Feb. 19 (Bloomberg) -- Corn, wheat and soybeans declined after the Federal Reserve raised the discount rate for the first time in more than three years, boosting the dollar and potentially crimping overseas demand for U.S. crop supplies. Corn for May delivery fell as much as 1.1 percent to $3.65 a bushel in after-hours electronic trading on the Chicago Board of Trade. The price also fell after the U.S., the world’s biggest grower, raised estimates for corn planting. The market is “looking at plantings and planting intentions,” Jonathan Barratt, managing director at Commodity Broking Services Pty. in Sydney, said by phone. Still, today’s losses in corn, soybean and wheat prices have “more to do with the dollar play,” Barratt said. The contract traded at $3.66 a bushel at 2:21 p.m. Singapore time, taking losses to 1.9 percent this week. The dollar gained 0.5 percent against a basket of six major currencies including the yen and the euro. Corn sowing will rise to 89 million acres (36 million hectares) this year from 86.5 million last year, Joe Glauber, chief economist at the U.S. Department of Agriculture, said yesterday. The Fed’s decision aided the dollar, hurting commodities priced in the U.S. currency. Gold and oil also declined. “The rising dollar continues to keep investors away,” said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. The dollar gained to $1.3462 per euro at 2:16 p.m. in Singapore from $1.3527 yesterday in New York, after climbing to $1.3444, the strongest since May 18. Crop Quality Japan, the world’s biggest corn importer, and South Korea, the third-largest, are switching to suppliers from Brazil and Argentina on concern that the quality of the U.S. crop may have deteriorated after wet weather in the Midwest delayed harvesting in the North American nation’s largest producing region. Buyers in South Korea are “worried that the U.S. doesn’t have enough capacity to dry up its crop,” Park Yong, the Chicago-based chief market analyst for CJ Corp., the nation’s biggest food processor, said yesterday in an interview. Japan’s corn purchases from Brazil for shipment between January and June rose to at least 500,000 tons, more than 10 times the volume sought in 2009, while orders from Argentina reached 100,000 tons, close to the full-year shipments posted last year, Nobuyuki Chino, president of Unipac Grain Ltd. in Tokyo, said in an interview Feb. 17. ‘Stronger Dollar’ The quality issue is “a focus, but I don’t think it’s a key focus at the moment,” Commodity Broking’s Barratt said. The main influence on prices is the stronger dollar, he said. May-delivery wheat, which can be used to replace corn in animal feeds, fell 1.1 percent to $4.94 a bushel at 2:53 p.m. Singapore time, taking losses to 1.5 percent this week. Soybeans for delivery the same month lost as much as 1.7 percent to $9.41 a bushel before trading at $9.4775. Futures are headed for a 0.7 percent decline this week. Argentina, the third-largest soybean exporter, may exceed a forecast for a record harvest of 52 million tons as rains aid crops, the Buenos Aires Cereals Exchange said yesterday. Rice for May delivery lost 0.4 percent to $13.59 per 100 pounds in Chicago at 2:19 p.m. Singapore time, set for a 4.7 percent decline this week. The Philippines, the world’s biggest rice importer, will allow private companies and cooperatives to import 200,000 tons at state-subsidized tariffs, taking the nation’s purchases to a record 2.45 million tons, Romeo Jimenez, National Food Authority marketing director, said today. To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

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