Soybeans, Corn Gain as Late Planting Erodes U.S. Crop Prospects

By Jae Hur

Aug. 21 (Bloomberg) -- Soybeans climbed for a second day and corn gained, after reaching its highest in more than two weeks, on speculation that plantings delayed by Midwest floods will reduce prospects for U.S. crops.

Before today, soybeans had gained 6.6 percent this week and corn jumped 8.3 percent on concern that adverse weather, disease or pest problems may shrink yields. Excessive rains in June in parts of Iowa and Illinois, the largest U.S. producers of both crops, postponed the planting of corn and soybeans.

``The market has been supported by concerns over the delay in crop maturity,'' Kenji Kobayashi, an analyst at Kanetsu Asset Management Co. in Tokyo, said by phone today. This has stoked concern that late-planted crops will suffer from dry weather this month and may be exposed to the potential for frost damage in September, he said.

Soybeans for November delivery gained as much as 10 cents, or 0.8 percent, to $13.10 a bushel in after-hours electronic trading on the Chicago Board of Trade. They traded at $13.0825 as of 12:18 p.m. Singapore time after gaining 1.9 percent yesterday. The most-active contract has surged 60 percent in the past 12 months, reaching a record $16.3675 on July 3.

Corn for December delivery added as much as 0.4 percent to $5.9725 a bushel and traded at $5.97 as of 12:19 p.m. in Singapore. The contract advanced as much as 1.8 percent yesterday to $5.9775, the highest since Aug. 1. The price has soared 68 percent in the past year, reaching a record $7.9925 on June 27.

Ohio Yields

Farmers in Ohio, the seventh-biggest corn-growing state, may harvest 148.8 bushels an acre, less than the 160 bushels forecast by the U.S. Department of Agriculture on Aug. 12, according to participants on the annual Pro Farmer Midwest Crop Tour. In Illinois, the second-largest U.S. corn producer, yields in dry areas may fall short of the USDA's 172-bushel forecast, they said.

Indiana's corn crop is expected to almost match U.S. government forecasts, tour participants found, with yields of 163.8 bushels an acre indicated by sampling, compared with a USDA estimate of 164 bushels.

In Nebraska, the third-biggest corn-producing state, yields of the grain may average 141.8 bushels an acre, according to participants on the western leg of the tour, less than the Aug. 12 USDA estimate of 163 bushels an acre.

U.S. soybean yields are forecast to fall to 40.5 bushels an acre from 41.6 bushels estimated in July and 42.1 bushels projected in June, the USDA said last week. Last year, farmers harvested an average 41.2 bushels per acre.

Corn Forecast

The department raised its forecast for this year's corn yields to 155 bushels an acre, from 148.4 bushels estimated last month. Farmers harvested 151.1 bushels per acre last year.

``The U.S. Department of Agriculture may revise its forecast for the yields of corn lower and reduce soybean yields further in September,'' Kobayashi said.

Corn and soybeans were also supported by a rally in crude oil prices that could boost demand prospects for biofuels made from the two crops, he said. Crude oil for October delivery rose as much as 1 percent to $116.70 a barrel on the New York Mercantile Exchange, gaining for a third day.

Wheat for December delivery advanced 0.3 cent at $9.025 a bushel at 12:22 p.m. Singapore time after gaining 3.4 percent yesterday. The contract has gained 31 percent in the past year, touching a record $13.495 on Feb. 27.

To contact the reporter on this story: Jae Hur in Singapore at jhur1@bloomberg.net