Soybeans Advance Amid Speculation U.S. May Lower Crop Forecasts

By Jae Hur

Sept. 11 (Bloomberg) -- Soybeans advanced amid speculation U.S. farmers may harvest less than the government forecast last month after dry weather in August damaged crops already slowed by the worst flooding in 15 years. Corn was little changed.

The U.S. Department of Agriculture on Sept. 12 will project a soybean crop of 2.955 billion bushels, according to the average estimate of 24 analysts surveyed. That's down 0.6 percent from the USDA's August estimate. A crop of that size would be 14 percent bigger than last year's 2.585 billion-bushel harvest after farmers planted 18 percent more acres with the oilseed.

``Soybeans were supported by the survey result,'' Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd. in Tokyo, said today by phone. ``However, the dollar's strength against the euro put a cap on the price gain.''

Soybeans for November delivery gained as much as 0.9 percent to $11.88 a bushel in after-hours trading on the Chicago Board of Trade and was at $11.815 by 3:05 p.m. Singapore time.

Futures, which touched a five-month low of $11.57 on Sept. 9, have slid 28 percent from a record $16.3675 on July 3.

Corn for December delivery was unchanged at $5.3675 a bushel as of 3:08 p.m. Singapore time after trading between $5.35 and $5.3875. The futures, which lost 1.4 percent yesterday, have fallen 33 percent from a record $7.9925 on June 27.

The U.S. corn harvest will total 12.126 billion bushels, according to the survey, down 1.3 percent from the USDA's August estimate. Last year's harvest totaled 13.074 billion bushels after farmers increased planted acreage to a 63-year high.

Field Surveys

The government's crop estimates tomorrow will be the second this year based on actual field surveys and are backed up by interviews with farmers.

The USDA raised its forecasts of the corn crop in September in the past two years. Last year, its final estimate in January was 1.8 percent lower than the September projection, and two years ago it was 5.5 percent lower.

``Many traders will prefer to be on the sidelines'' ahead of Friday's USDA report, said Toby Hassall, an analyst at Commodity Warrants Australia in Sydney. ``While the upward momentum in the dollar appears very strong, I believe we may see some temporary support in crude prices at $100 a barrel which would likely ease the downward pressure on the grains.''

The dollar climbed to $1.3933 per euro, the strongest since Sept. 18, 2007, before trading at $1.3963. Crude oil for October delivery rose as much as 1.3 percent after declining as low as $101.36 yesterday, a five-month low.

Wheat for December delivery was down 2 cents at $7.2375 a bushel as of 3:10 p.m. Singapore time after falling yesterday as low as $7.16, the lowest since Aug. 29, 2007. Futures have fallen 46 percent below the $13.495 record set in February as farmers boosted acreage to gain from the 77 percent rally in 2007.

Australia, the world's sixth-largest wheat exporter, may harvest less of the grain than previously forecast because of dry weather in some states, ProFarmer Australia said.

Production may be 22.7 million tons, down from an August estimate of 24.5 million tons, the Perth-based forecaster said today. That compares with last year's drought-reduced crop of about 13 million tons.

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