Bloomberg Grain and Soft Commodity (Update1)

June 2 (Bloomberg)

Soybean
Soybeans declined on speculation that the highest prices in eight months will curb demand for supplies from the U.S., the world’s top grower and exporter.

The price jumped 28 percent in the two months before today on increased imports by China, which may slow purchases once the government makes good on its plan to stockpile the equivalent of half its domestic output. U.S. demand for feed made from the oilseed may drop because hog, cattle and milk producers may be forced to cull herds after months of losses, said Greg Grow at Archer Financial Services in Chicago.

Corn
Corn prices rose on speculation that farmers in the U.S. Midwest will swap the crop for soybeans because rainfall has delayed planting beyond optimal dates for reaching full yield potential with the grain.

About 93 percent of the U.S. corn crop was planted as of May 31, the Department of Agriculture said yesterday in a report. That compares with 94 percent a year earlier and a five- year average of 97 percent. U.S. farmers will plant 1.2 percent fewer acres with corn, the agency said in March, after surveying growers. The USDA will revise its acreage estimate on June 30.

Cocoa
Cocoa prices rose to an eight-week high in New York on speculation that merchants and chocolate makers are boosting purchases in anticipation of a rebound in demand.

Cocoa jumped 9 percent in May. Last month, hedge funds and other large speculators decreased their net-long positions, or bets price will rise, by 47 percent in New York futures, U.S. Commodity Futures Trading Commission data show. Growers, processors and other commercial users cut their net-short positions by 43 percent in the same period.

This “leads us to believe that commercials have been strong buyers, and that demand is probably considerably more bullish than indicated,” Friedberg Mercantile Group Ltd. said yesterday in a report.

Coffee
Coffee futures fell for the first time in four sessions on speculation that supplies of arabica beans from Brazil may be enough to offset a drop in output from Colombia. Orange-juice futures also declined.

Brazil’s coffee crop, the world’s largest, is entering the slow stage of its two-year production cycle, and the harvest may be 18 percent smaller than a year earlier, according to a report yesterday from a U.S. agricultural attache in Sao Paulo. Output will fall less than the 23 percent decline two years ago, when trees rested from a large crop in 2006, the attache said.