By Glenys Sim

March 26 (Bloomberg) -- Soybeans jumped by the daily limit in Chicago, leading a commodity rally, as farmers in Argentina blocked ports and threatened to plant fewer crops to protest rising export taxes.

Growers in the country, the third-biggest exporter of the oilseed, prevented trucks from entering ports and warehouses, sending prices of the commodity to their highest in more than a week. Crude oil gained as fighting in southern Iraq may disrupt supplies and gold rebounded after an industry report signaling economic growth in Germany sent the dollar lower.

``The U.S. economy is weak and OECD economies are slowing, but from a global perspective, emerging markets remain reasonably good,'' said Peter Richardson, macro and commodity strategist at Macquarie Alternative Investments Ltd. in Melbourne. ``That's probably contributed to this rebound.''

Soybeans for May delivery gained the 50-cent maximum for a third day, rising to $13.57 a bushel on the Chicago Board of Trade. The commodity traded at $13.50 a bushel at 9:56 a.m. in London. Soybeans have gained 78 percent in the past year.

Commodities are in their seventh year of gains on demand from China and disrupted supplies of metals and crops. The UBS Bloomberg Constant Maturity Commodity Index climbed 34 percent in the past year even after droppihttp://www.bloomberg.com/apps/news?pid=20601087&sid=aE4tnWM_Ob_Q&refer=homeng 8 percent last week.

Raw material prices needed ``a bit of a correction to bring them back to more reasonable levels and I think that has been achieved,'' Richardson said by telephone today.

The commodity rally in the past year is almost triple the 12 percent return on U.S. Treasuries, according to Merrill Lynch & Co. indexes. The Standard & Poor's 500 Index of stocks has dropped 5.9 percent.

More Rate Cuts

The dollar fell against the euro, reversing an earlier gain, after an industry survey showed German business confidence unexpectedly rose in March, signaling economic growth at a time of a slowdown in the U.S. Traders are betting the Federal Reserve will cut U.S. interest rates by as much as a half-percentage point next month. A report today may show U.S. sales of new homes fell to the lowest since 1995, stoking concern the country is headed for a recession.

Soybeans jumped after Argentina introduced a variable-rate export tax that last week raised the levy to about 44 percent, from a fixed rate of 35 percent. President Cristina Fernandez de Kirchner dismissed farmer demands she roll back the increases. Eduardo Buzzi, president of the Argentine Agriculture Federation, said the strike will go on ``as long as necessary''.

``Fewer soybean exports from Argentina will help overseas demand shift to the U.S.,'' said Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co.

Iraq Fighting

Crude oil rose for a second day, tracking gasoline higher.

Clashes between Iraqi forces and fighters loyal to Shiite Muslim cleric Moqtada al-Sadr left at least 18 people dead and 40 hurt in the southern city of Basra, the site of Iraq's second- biggest oil refinery.

Crude oil for May delivery rose as much as $1.03, or 1 percent, to $102.25 a barrel on the New York Mercantile Exchange and traded at $102.11 as of 9:56 a.m. in London. U.S. gasoline stockpiles probably dropped 1.15 million barrels last week, according to a Bloomberg News survey. The Energy Department is set to release its weekly report on inventories at 10:30 a.m. in Washington.

Gold for immediate delivery climbed $4.59, or 0.5 percent, to $943.38 an ounce as of 9:55 a.m. in London. The precious metal jumped to a record $1,032.70 an ounce on March 17.

``We are positive on gold and we think it will retrace to the $1,000 level,'' Dan Miller, Asia Pacific head of mining and metals at Standard Chartered Bank in Singapore, said in a Bloomberg Television interview today. ``We think it's going to follow the U.S. dollar relatively closely these days.''

source from: http://www.bloomberg.com/apps/news?pid=20601087&sid=aE4tnWM_Ob_Q&refer=home

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