Corn and soybeans rose, capping their best second-half performances in at least five decades, as stockpiles tumbled and adverse weather threatened crops in South America. U.S. corn inventories before next year’s harvest will decline to the lowest since 1996 and global consumption will outpace supplies for a second year in the season ending Aug. 31, U.S. Department of Agriculture data show. Warm, dry weather has threatened crops in Brazil and Argentina, the biggest shippers after the U.S. “Damage is occurring daily and it is irreversible,” said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “These prices have not slowed demand.” Corn futures for March delivery rose 13 cents, or 2.1 percent, to close at $6.29 a bushel at noon on the Chicago Board of Trade, capping the 10th gain in 11 sessions. Earlier, the grain reached $6.30, the highest since July 2008. Prices surged 68 percent since June 30, the biggest gain in the second half since at least 1959, when Bloomberg data begins. Warm, dry weather until Jan. 15 will increase stress on South American crops, World Weather Inc. said in a report today. In the past 30 days, rainfall was 50 percent below normal in the Argentine states of Buenos Aires and Cordoba and in southern Brazil. In Argentina’s La Pampa, rain was 75 percent below average. Soybeans Climb Soybean futures for March delivery rose 27 cents, or 2 percent, to close at $14.03 a bushel. Earlier, the price reached $14.04, the highest since August 2008. The most-active contract gained 34 percent this year, the biggest annual gain since 2007. The oilseed rose 55 percent since June 30 on record Chinese demand for supplies from the U.S., the world’s biggest exporter. That’s also the best second half performance since at least 1959. Falling supplies and a weaker dollar will increase investor demand for commodities next year, Gerlach said. The dollar fell to a five-week low today and dropped 8.1 percent since June 30 against a six-currency basket. “Investors are looking at a tightening global supply situation for 2011, and that’s before any weather problems in the U.S.,” Gerlach said. “The weakness in the dollar is a sign that investors are taking on more risky trades.” Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government data show. To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net.

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