Soybeans Climb Corn Futures Jump on Bets USDA Will Cut Output Forecast

Corn rose for a second straight session on speculation that the government will reduce its U.S. crop forecast next month. Soybeans also gained. Changing expectations by U.S. corn farmers contributed to a surprising cut in a production forecast this month, the Department of Agriculture said yesterday. Prices jumped to a two-year high on Oct. 13 on mounting speculation that the government will again lower its outlook in its next report on Nov. 9.

?People are looking for a further cut in U.S. corn production, and that will force end-users to increase purchases? as inventories shrink, said Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago.

Corn futures for December delivery rose 5 cents, or 0.9 percent, to $5.7375 a bushel at 12:52 p.m. on the Chicago Board of trade. The price, which rose 33 percent in the third quarter, touched $5.88 on Oct. 13, the highest since Aug. 29, 2008.

On Oct. 8, the USDA cut its corn-crop estimate for the second time in as many months, predicting a 3.4 percent drop in the domestic harvest. U.S. reserves before the next harvest are forecast to fall to the lowest since 1997.

While farmers will collect the most soybeans ever, the total will be 2.2 percent less than forecast in September, the USDA said earlier this month.

?Selling Every Bushel?

?Even with a record soybean crop, we are selling every bushel, led by Chinese demand,? Grow said.

The country will boost imports of the oilseed by 65 percent this month compared with a year earlier, the China National Grain & Oils Information Center said on Oct. 21.

Soybean futures for January delivery rose 2 cents, or 0.2 percent, to $12.32 a bushel in Chicago. Earlier, the commodity touched $12.36, the highest level since June 2009.

Before today, the commodity used to make animal feed and cooking oil, gained 36 percent since July 1.

Corn is the biggest U.S. crop, valued at $48.6 billion last year, followed by soybeans at $31.8 billion, government figures show.