Corn surged to a record and soybeans and wheat prices jumped on mounting signs the U.S. drought will erode production. Treasuries pared earlier losses after the U.S. sold $16 billion of 30-year bonds, while the Standard & Poor’s 500 Index advanced a fifth day and the euro weakened.
Treasuries fell for the first time in three days as the Federal Reserve opened a meeting amid speculation it may do more to boost the economy and investors bet European leaders will make progress on their debt crisis.
As the U.S. recovery slows and Federal Reserve efforts to boost growth expire, there’s no consensus among the biggest bond dealers that the central bank will begin a fourth round of economic stimulus with consumer and corporate borrowing costs already at record lows.
Treasury 30-year bond yields touched the lowest level in more than a week before the Federal Reserve opens a two-day policy meeting amid speculation on whether it will take further steps to boost economic growth.
Treasuries rose, pushing the yield on the 10-year note to almost record lows, as concern mounted that a possible Greece exit from the euro may worsen the region’s debt crisis, boosting haven demand for U.S. government debt.
Treasury 10-year note yields reached a seven-month low as Federal Reserve policy makers said more economic stimulus may be needed and the European Central Bank said it will suspend some operations with Greek banks.