Corn Reaches Record, Soybeans at Three-Month High on Heavy Rain

June 6 (Bloomberg) -- Corn climbed for a third day to a record and soybeans rose to a three-month high in Chicago as excessive rains in the U.S. Midwest flooded some fields, raising concerns about slowing crop development and production losses.

The National Weather Service's six to 10-day outlook issued yesterday showed above-normal precipitation in the U.S. Midwest, including Iowa and Illinois. About 63 percent of the U.S. corn crop was in good or excellent condition as of June 1, down from 78 percent a year earlier, a government report showed June 2.

``Firstly, the sharp rise in prices was catalyzed by wet U.S. weather,'' said John Reeve, associate director for agricultural commodities at UBS AG in Singapore. ``Secondly, and more importantly, the size of the response signals just how low grain and oilseed inventories are.''

Corn for July delivery was up 6 cents, or 0.9 percent, at $6.4925 a bushel at 4:46 p.m. Singapore time in after-hours electronic trading on the Chicago Board of Trade. The price gained 4.7 percent yesterday. Most-active futures are up 73 percent in the past year as demand surged for feed and biofuels.

Soybeans for July delivery rose 10.75 cents, or 0.7 percent, to $14.6275 a bushel, the highest since March 6, at 4:48 p.m. Singapore time. The contract, which touched a record $15.865 on March 3, is up 78 percent from a year earlier.

About 74 percent of the U.S. corn seeds had emerged in the top 18 producing states, down from 92 percent a year earlier and the previous five-year average of 89 percent, the U.S. Department of Agriculture said June 2 in the report.

Planting Delay
Soybeans were 69 percent planted as of June 1, compared with the five-year average of 81 percent, the USDA said. About a third of the crop had emerged from the ground, compared with 64 percent a year earlier.

Corn and soybeans planted in wet, cool soil develop shallow roots, increasing the threat of damage from hot, dry weather in July and August.

More than 4 million acres remained to be planted with corn as of June 1, and 23 million acres awaited soybean seeds, the USDA said earlier this week. U.S. farmers said in a survey in March they would plant 8.1 percent less corn this year and increase soybean acreage 18 percent, according to the USDA.

Wheat for July delivery was up 5 cents at $7.905 a bushel at 4:48 p.m. Singapore time. The price rose 4.3 percent yesterday on speculation that crops in Kansas, the largest U.S. producer of winter varieties, will be damaged by high winds and hail. The price fell 42 percent from a record $13.495 on Feb. 27 as farmers increased seeding of the grain.

Australia
Total grain output in Western Australia, the nation's biggest producing state, may be less than initial government expectations after dry weather in May. Production may be between 10 million metric tons and 12 million tons this harvest, the state's Department of Agriculture and Food said today.

The state said last month output could reach a record should seasonal conditions remain favorable. Today's forecast compares with the state's total grain production last year of 8.5 million ton. Its record output of 14.5 million tons was set in 2004. The state may produce 6.7 million tons of wheat, it said, compared with last year's 6.1 million.

Wheat production in South Australia state may rise 28 percent this year to 2.89 million, Rural Solutions SA, a government agency, said today. The state was the nation's second- largest wheat producer last harvest.

Rice for July delivery added 44.5 cents, or 2.3 percent, at $19.805 per 100 pounds at 4:37 p.m. Singapore time. The contract gained by the daily limit of 75 cents yesterday after the USDA said U.S. export sales in the week ended May 29 more than tripled to 69,400 metric tons from the previous week.

Rice has advanced 89 percent in the past year, reaching a record $25.07 on April 24, after some exporters curbed exports to ensure local supplies.