Soy up, leads corn and wheat recovery

SEOUL (Reuters) - Soybean futures were higher in Asian trading on Tuesday, leading a recovery in wheat and corn, which retreated in early trade on mounting selling pressure following a rally to record highs.

A corn crop sits in standing floodwaters near Loveland, Iowa, June 12, 2008. REUTERS/Dave Kaup

Soybeans were bolstered by weather woes and export worries as the Mississippi River, the main shipping artery for grains to Gulf export terminals, is closed due to high river levels after heavy rains in the past week.

July soybean rose 0.5 percent to $15.42 a bushel and August contract rose 0.7 percent to $15.47-1/2.

The grain also received some support from conflict between Argentine government and its farmers over a soy export tax.

Farm leaders in the world’s top soymeal exporter announced overnight a fresh freeze on grain sales until Wednesday, when pro-government groups plan to rally in a sign of further escalation of the three-month conflict.

Firmer trade in soybean helped corn rebound amid persistent worries over supply concerns.

July corn futures rose 0.03 percent to $7.32-3/4 a bushel, extending a winning streak to the 10th consecutive session, and December contract also inched up 0.1 percent to $7.65-3/4.

U.S. corn has jumped 60 percent so far this year and rose above $8 a bushel for the first time overnight, bolstered by concerns about flood-related crop losses in the U.S. Corn Belt.

The grain saw its prices soaring since the U.S. Agriculture Department last week trimmed its U.S. corn average yield projection by 5 bushels per acre and cut its season-ending stocks estimate for the 2008/09 marketing year to 673 million bushels-- the smallest in 13 years.

That was before last week’s flooding, and supply concerns continue to persist, as USDA’s Iowa state crop report said that 9 percent of the state’s corn acres were flooded and 8 percent have been or will need to be replanted.

Wheat also traded firmer after major exporter Australia cut its wheat crop forecast.

The Australian government on Tuesday cut its forecast for the next wheat crop by 8.8 percent to 23.69 million tonnes because of a return of dry weather, a factor that helped global wheat prices to soar to record highs between late last year and early this year.

At the Chicago Board of Trade, July soft red winter wheat rose 0.2 percent to $8.78 a bushel and September contract gained 0.1 percent to $8.95-1/4.

Reporting by Miyoung Kim; Editing by Keiron Henderson and Jonathan Hopfner