Soybeans Reach Record for Second Day in Asia on Supply Concern

By Aya Takada

July 2 (Bloomberg) -- Soybeans rose to a record for a second day on concern the worst Midwest flooding in 15 years may curb gains in production and inventories in the U.S., the largest producer and exporter. Corn also advanced and wheat declined.

Soybeans gained as much as 0.8 percent after booking the biggest quarterly gain in 20 years. U.S. farmers may harvest 96.8 percent of the acres planted, down from an earlier forecast of 98.1 percent, the U.S. Department of Agriculture said June 30 in a report. The USDA projected inventories of 175 million bushels before next year's harvest, or 21 days of usage.

``The figures may be revised down further, as the report did not fully reflect the impact of the Midwest flooding,'' Kenji Kobayashi, an analyst at Kanetsu Asset Management Co. in Tokyo, said by phone today.

Soybean futures for November delivery rose 7.25 cents, or 0.5 percent, to $16.1725 a bushel in after-hours trading on the Chicago Board of Trade at 11:18 a.m. in Tokyo, after earlier reaching a record $16.20.

The most-active contract jumped 15 percent in June and 31 percent in the second quarter, the most since the three months through June 1988. Prices gained 87 percent in the past year.

U.S. farmers intended to sow 74.533 million acres of soybeans, and about 95 percent of the crop was planted on June 29, leaving 3.7 million acres yet to plant, USDA data show. The USDA said June 30 harvested acreage would have been 1.3 million acres larger without the flooding.

Farmers Strike

The price also rose on speculation U.S. inventories before the harvest will be smaller than the USDA's forecast on June 10. A three-month old farmers' strike in Argentina boosted demand for U.S. supplies, analysts said.

Corn rose for the first time in four days as rising crude oil rekindled speculation demand for the grain in biofuel production may increase, leading to a drawdown in inventories, Kobayashi at Kanetsu Asset Management said.

Corn for December delivery added 4.25 cents, or 0.6 percent, to $7.5625 a bushel on the Chicago Board of Trade at 11:18 a.m. in Tokyo. Prices plunged the 30-cent maximum allowed by the exchange on June 30 after the USDA reports showed U.S. farmers planted more acres than they indicated three months ago and that crop conditions improved.

Corn futures, which rose to a record $7.9925 on June 27, gained 33 percent in the last quarter and more than doubled in the past year as global reserves are forecast to fall to a 24- year low by the end of August.

Wheat Declines

Wheat fell after Rabobank Group said the likelihood of a rebound in output in Australia, forecast to be the world's third- largest exporter of the grain, improved after rain in June.

Wheat production may be 20 million metric tons to 24 million tons, the bank said in a report e-mailed today, restating an earlier estimate. Australia's worst drought slashed the nation's wheat output the past two harvests, helping send global prices to an all-time high.

September-delivery wheat lost 1.75 cents, or 0.2 percent, to $8.63 a bushel on the Chicago Board of Trade at 11:15 a.m. in Tokyo. Prices declined from a record $13.495 set on February 27 on speculation that global production will increase.

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