By Jae Hur June 16 (Bloomberg) -- Soybeans climbed on speculation that higher oil prices may boost demand for the crop as a source of biofuel. Wheat, little changed, may also gain on concern that rains may reduce production in the U.S. and Canada. The most-active contract for the oilseed on the Chicago Board of Trade rose as much as 0.6 percent, while corn, used to make ethanol, matched yesterday’s one-month high. Oil gained to more than $77 a barrel in New York after a report on U.S. manufacturing boosted optimism that the recovery remains intact. “It’s not strange for corn and soybeans to get support from higher oil prices,” said Toshimitsu Kawanabe, an analyst at Tokyo-based commodity broker Central Shoji Co. Still, the gain in the two crops may be limited as favorable weather has improved U.S. crop conditions, he said. Soybeans for November delivery gained as much as 5.25 cents to $9.2075 a bushel, and last traded at $9.2025. The price reached $9.2625 yesterday, the highest level for a most-active contract since June 8. Corn for December delivery climbed as much as 1 cent to $3.76 a bushel, and traded at $3.7575 at 1:52 p.m. Singapore time. Futures dropped 9.4 percent this year, in part on forecasts for higher U.S. output. Soybeans were partly supported by a jump in canola prices in Canada, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a daily note today. Canada is the largest exporter of canola, also known as rapeseed, followed by Ukraine, according to U.S. Department of Agriculture data. Canola Gains Canola for November delivery added 0.8 percent to C$421 ($410.21) a ton on the ICE Futures Canada exchange today after earlier touching C$421.70, the highest level since Dec. 16. That’s the eighth gain, the longest winning streak since Jan. 6. The gains in canola were the result of weather concerns in Canada and confirmation that China will continue to accept Canadian canola in 2010 under existing conditions, Mathews said. Wheat for September delivery rose 2.25 cents to $4.6975 a bushel in Chicago. The price touched $4.7175 yesterday, the highest level since May 28. “Further rain is expected in the saturated Canadian Prairies, which will limit spring-wheat production, and the winter-wheat harvest in the U.S. southern plains will slow because of rain,” Mathews said. Heavy Rainfall Oklahoma’s winter-wheat crop, the nation’s second-largest behind Kansas, has been damaged by heavy rain, the Oklahoma Wheat Commission said in an e-mail. Twelve inches (30 centimeters) of rain have fallen in some areas of the state, toppling wheat plants, the group said. About 38 percent of the Oklahoma crop was collected as of June 13, up from 12 percent a week earlier, the U.S. Department of Agriculture said in a report on June 14. Farmers who have yet to harvest their grain may not get back into fields this week, the commission said. Australia, the world’s fourth-largest wheat exporter, kept its forecast for the next harvest little changed, according to a government agency. Output may be 22.1 million metric tons in 2010-11, compared with a March estimate of 21.94 million tons, the Australian Bureau of Agricultural and Resource Economics said today. The previous harvest was 21.66 million tons. Australia’s canola harvest may reach 2 million tons, the bureau said, raising its outlook from a March estimate of 1.6 million tons. Output last year was 1.9 million tons, according to the agency. To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net

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