Soybeans Rebound as Midwest Rain Threatens to Curb U.S. Output

June 17 (Bloomberg) -- Soybeans rose the most in almost two weeks on speculation that rainfall will lead to a smaller increase in the number of acres farmers plant this year in the U.S., the world’s largest grower and exporter.

Planting was 87 percent finished as of June 14, compared with a five-year average of 92 percent, the U.S. Department of Agriculture said. About 72 percent of plants had emerged from the ground, compared with a five-year average of 83 percent. U.S. farmers had intended in March to boost planting by 0.4 percent to a record 76.024 million acres.

“There is an increased risk for lower soybean yields from all the rain,” said Bill Nelson, a senior economist for Doane Advisory Service Co. in St. Louis. “Fields have been absolutely drenched this week, and presumably that will mean fewer acres will be planted in Missouri, Illinois, Arkansas, Indiana.”

Soybean futures for November delivery, after the harvest, rose 21.5 cents, or 2.1 percent, to $10.50 a bushel on the Chicago Board of Trade, the biggest gain since June 4. Yesterday, the price touched $10.205, the lowest for the contract since May 26. Soybeans for July delivery, before the harvest, rose 5 cents, or 0.4 percent, to $12.0625.

As much as 3 inches (7.6 centimeters) of rain fell from northwest Arkansas to central Ohio in the past 24 hours, data from the National Weather Service show. The area has received as much as four times the normal rainfall during the past two weeks. Wet weather last month delayed corn planting and led to speculation that farmers would sow as much as 3 million more acres of soybeans, which grow more quickly.

Below Average

Soybean planting in Illinois, the biggest-producing state after Iowa, was 73 percent completed this week, less than the average of 92 percent in the previous five years, government data show.

The yield potential for fields planted after June 20 in Illinois will drop as much as 22 percent, and 30 percent for those sown after this month, according to Mike Toohill, an agronomist for Midwest Seed Genetics in Bloomington, Illinois.

“Lots of beans” have “yet to be planted around the state,” Toohill said in a report yesterday. “And with wet soils in many areas right now, it looks like the soybean- planting season will drag into late June and maybe even July in some areas of the state.”

The average U.S. yield this season has been forecast by the USDA at 42.6 bushels an acre, up 7.6 percent from 39.6 bushels last year.

Reduced Yield Potential

“U.S. yield potential is closer to 41 to 41.5 bushels,” Nelson said. “The inventory of soybeans is tight and will remain a positive fundamental factor.”

Domestic stockpiles on Aug. 31 will drop to 110 million bushels, down from 130 million projected in May and 46 percent less than a year earlier, the USDA said June 10. Inventories will reach 210 million bushels before the 2010 harvest, down from 230 million estimated in May, the department said.

Soybeans were the second-most valuable U.S. crop last year at a record $27.4 billion, behind corn at $47.4 billion, government figures show.