By Luzi Ann Javier May 27 (Bloomberg) -- Soybean futures rose in Chicago on speculation that the U.S. government will report higher demand from crushers and that dryness caused by La Nina weather conditions may hurt the crop. Soybeans for July delivery rose as much as 0.6 percent to $9.44 a bushel on the Chicago Board of Trade, and traded at $9.4325 a bushel at 12:46 p.m. Paris time. La Nina may cause dry weather in late summer, hurting the U.S. soybean crop, AgTraderTalk said in a report yesterday, citing unidentified analysts. There is a “growing possibility” of La Nina developing in the second half of 2010, the U.S. Climate Prediction Center said in a May 24 report. The U.S. Census Bureau is scheduled to release a report today on April soybean crushing by U.S. processors. “Until we get a more certain view of the ultimate production size, there is the potential for the market to price in a yield-risk premium,” Toby Hassall, a research analyst at CWA Global Markets Pty, said by phone from Sydney today. La Nina, characterized by colder-than-normal sea surface temperatures in the equatorial Pacific, can cause drier-than- normal conditions in South and North America during their respective winter seasons, and may bring more rains in Asia and northern Australia, according to the U.S. climate center. Corn for July delivery rose as much as 0.3 percent to $3.7275 a bushel, and traded at $3.725 a bushel recently. China Shortage Prices may rise on speculation supplies of the grain in China, the world’s second-largest consumer, may be smaller than estimated by the U.S. Department of Agriculture and the Chinese government, Hassall said. China’s corn demand may exceed output by as much as 10 million metric tons in the year through Sept. 30, and the government may have issued more corn import permits to meet the shortage, Li Qiang, managing director of independent researcher Shanghai JC Intelligence Co., said yesterday. State-owned Cofco Ltd., China’s largest grain trader, hasn’t been given new import quotas in addition to the 500,000 tons the company already received this year, and no new purchases have been planned, said an executive who declined to be identified as he isn’t authorized to speak to the media. The USDA forecast on May 11 that China’s corn output will drop 6.6 percent to 155 million tons in the year ending Sept. 30, and demand will match that output. ‘Enough’ Corn China has “more than enough” corn to meet demand, with just a third of stockpiles ample to cover current consumption, Zeng Liying, deputy director of the State Administration of Grain said May 24, without elaborating. The Asian nation sold about 4.67 million tons of corn in weekly auctions from April 13 through May 25, as the government pares stockpiles to cool prices that have climbed 11 percent in the past six months, according to data compiled by Bloomberg. Wheat for July delivery rose as much as 1.2 percent to $4.6725 a bushel in Chicago, and traded last at $4.6675 a bushel. Milling wheat for November delivery traded on NYSE Liffe in Paris rose 0.5 percent to 144.50 euros ($177.75) a metric ton at 12:53 p.m. local time. To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net.

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