Soybeans Rise on Bets Rain to Reduce U.S. Midwest-Crop Yields

July 13 (Bloomberg) -- Soybeans rose to an eight-week high on speculation that heavy Midwest rainfall during the past six weeks will reduce yields in the U.S., the world’s largest grower and exporter.

About 65 percent of the crop was rated good or excellent on July 11, down from 66 percent a year earlier and 75 percent in the week ended June 6, the U.S. Department of Agriculture said yesterday. Conditions deteriorated in Iowa, Nebraska, Missouri, Kansas and Ohio. Those states accounted for 44 percent of the 2009 record harvest, USDA data show.

“Soybean crop conditions fell below last year, and that is a positive factor” for prices, said Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago. “The crop is getting smaller.”

Soybean futures for November delivery rose 3.5 cents, or 0.4 percent, to $9.545 a bushel on the Chicago Board of Trade. Earlier, the price reached $9.625, the highest level for the most-active contract since May 14. The oilseed has gained 5.8 percent this month.

U.S. inventories totaled 571 million bushels as of June 1, down 4.2 percent from a year earlier, the government said on June 30. That marked the lowest level since 2004. Reserves will fall to 175 million bushels, 5.4 percent less than June’s forecast, the USDA said last week.

“Soybean supplies are tight,” Grow said. “There is little margin for crop problems this year.”

Soybeans are the second-biggest U.S. crop, valued at $31.8 billion in 2008, government figures show. Corn is the biggest at $48.6 billion.