Soybeans Rise Near to 8-Month High, Corn Gains to 7-Month Peak

By Jae Hur

June 1 (Bloomberg) -- Soybeans jumped close to an eight- month high and corn climbed to a more than seven-month peak on speculation rain may delay planting, possibly damaging yields for some crops already seeded in the U.S. Midwest.

Rain that falls over the next few days will hinder planting efforts of farmers, according to a forecast yesterday from AccuWeather.com. Corn planting remains several weeks behind schedule in parts of the Midwest, it said. In areas where planting has taken place, any new flooding issues could damage existing crops, the forecaster said.

“Forecast for rain this week has stoked concerns over planting delays of corn as well as soybeans,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co.

Soybeans for July delivery added as much as 1.3 percent to $11.995 a bushel on the Chicago Board of Trade and were $11.99 by 10:04 a.m. Singapore time. The most-active contract rose 1.5 percent last week, climbing for a fifth straight week, and jumped 12 percent in May, the third straight monthly advance. The price touched $12.0075 on May 27, the highest since Sept. 25.

U.S. soybean inventories on Aug. 31, before the harvest, will drop to a five-year low of 130 million bushels from 205 million bushels a year earlier, the USDA said on May 12.

The weaker dollar has boosted demand for soybeans and corn as well as other commodities, Kikukawa said. The dollar weakened to a five-month low on May 29 and fell 7 percent in May, its biggest monthly decline this year against the euro.

Planting Delays

Corn for July delivery was 0.2 percent higher at $4.37 a bushel at 10:10 a.m. Singapore time after touching $4.3775, the highest since Oct. 9. The grain rose 8 percent in May on speculation planting delays would reduce acreage and yields in the U.S.

Commodities posted the biggest monthly rally in 34 years, as the slumping dollar bolstered demand for energy, metals and crops as a hedge against inflation. In May, the Reuters/Jefferies CRB Index of 19 raw materials gained 14 percent, the most since July 1974.

Signs of a recovery in the global economy have spurred demand for fuel, metals and crops. Crude oil rose 30 percent in May, the biggest monthly gain in a decade, boosting demand prospects for corn and soybeans as a source for biofuel.

July-delivery wheat rose as much as 0.9 percent to $6.43 a bushel and was at $6.42 by 10:06 a.m. Singapore time. The most- active contract advanced 18.8 percent last month, the biggest such gain since September 2007, on speculation that adverse weather will harm U.S. crops.

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