By Jae Hur and Alistair Holloway Dec. 30 (Bloomberg) -- Corn and soybeans declined on speculation that the dollar’s advance for a second day may erode demand for supplies from the U.S., the world’s biggest producer of the crops. Wheat gained. The U.S. Dollar Index, which gauges the greenback’s strength against six currencies, climbed as much as 0.3 percent. A stronger dollar makes U.S. supplies less attractive to importers and investors holding other currencies. “For today, the dollar’s rally was the key factor for most commodities,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co. Overall trade was thin as the market prepares for the New Year holiday and the weekend, he said. Corn for March delivery fell for the first time in five days on the Chicago Board of Trade, dropping as much as 0.5 percent to $4.15 a bushel. The contract was down 0.4 percent at $4.1525 a bushel as of 9:50 a.m. in London. The most-active contract gained 2 percent this year and has more than doubled from $2.045 at the end of 1999. March-delivery soybeans declined for the first day in three, sliding 0.9 percent to $10.3725 a bushel. The most-active contract has increased 5.8 percent this year, partly because of rising demand in China for U.S. oilseeds. The price has more than doubled this decade, from $4.6975 at the end of 1999. Federal Reserve The dollar traded near a two-month high against the yen on speculation the Federal Reserve will withdraw stimulus measures as the economy recovers. The U.S. currency was set for its first monthly gain against the euro since June before a report economists said will show U.S. manufacturing expanded in December for a fifth month, adding to signs the economy is gaining momentum. Wheat for March delivery added 0.4 percent to $5.43 a bushel after losing 1.8 percent yesterday on speculation that demand for the U.S. crop will decline because rivals are offering cheaper shipments. From June 1 to Dec. 17, overseas buyers committed to purchase 16 million metric tons of wheat from the U.S., down 25 percent from a year earlier, Department of Agriculture data show. Actual shipments are down 29 percent to 12.2 million tons. Milling wheat for March delivery traded on Liffe in Paris added 0.2 percent to 134 euros ($192.25) a ton after closing unchanged yesterday. To contact the reporters on this story: Jae Hur in Tokyo at jhur1@bloomberg.net; Alistair Holloway in London at aholloway1@bloomberg.net

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