June 16 (Bloomberg) -- Corn climbed to a record near $8 a bushel as floods damaged crops in the U.S., the largest producer and exporter, threatening global food supplies.

Soybeans rose to a three-month high. The flooding may be the worst in the Midwest since 1993 and will probably cause ``hundreds of millions of dollars'' of damage, according to the National Weather Service. U.S. corn stockpiles may fall 53 percent to a 13-year low before next year's harvest, the U.S. Department of Agriculture said June 10.

Record crude oil, wheat, rice and soybean prices this year have driven inflation, forcing governments to increase interest rates as the economy slows and raising costs at companies such as Kraft Foods Inc., the world's second-largest foodmaker. Food and fuel costs have eclipsed the credit squeeze as the greatest threat to the world economy, the Group of Eight nations said.

``Inflation pressures are building around the world,'' stoked by food and fuel prices, David Cohen, director of Asian economic forecasting at Action Economics in Singapore, said by phone today. That's ``squeezing household budgets, especially the poorest, and company profits.''

Corn gained as much as 3.5 percent to $7.9150 a bushel in Chicago and has advanced 33 percent in the past two weeks. It's up 86 percent in the past year on record demand for biofuels and livestock feed as rising Asian incomes increase meat consumption.

High food prices ``are here to stay'' as governments divert resources to make biofuels, amass stockpiles and limit exports, Peter Brabeck-Letmathe, chairman of Nestle SA, the world's largest food company, said in an interview in Kuala Lumpur today.

`Serious Challenge'

``Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable and may increase global inflationary pressure,'' finance ministers from the Group of Eight nations said in a statement released after a June 14 meeting in Osaka, Japan.

Consumer prices last month probably rose the most since 1997 in the U.K. and the fastest in 16 years in the euro area, while U.S. producer prices are predicted to have gained 1 percent from April, according to economist forecasts.

The ministers met after the price of oil doubled in a year to an unprecedented $139.12 a barrel on June 6.

More thunderstorms were expected on Sunday in the U.S. Midwest, according to Accuweather.com. As much as 12 inches (30 centimeters) of rain dropped in the Midwest last week, and some fields had five times the normal moisture since the end of May, the National Weather Service said.

Argentine Protest

Argentine farmers intensified protests against higher export taxes after a farm leader was arrested by police, threatening to spark food shortages and halt the flow of grains in the country. Farmers began their fourth strike in three months yesterday, withholding crops and blocking roads.

The country is the world's third-largest soybean exporter behind the U.S. and Brazil, and second only to the U.S. for corn.

Corn for December delivery, after the harvest, traded up 2.6 percent at $7.85 in after-hours trading at 3:02 p.m. in Singapore. The grain for delivery from March to July 2009 rose above $8 for the first time on the Chicago Board of Trade.

Soybeans for July delivery rose 23.75 cents, or 1.5 percent, to $15.8375 a bushel, the highest since March 4. The most-active contract reached a record $15.865 March 3.

United Nations Secretary-General Ban Ki-moon called this month for a 50 percent increase in food output by 2030, saying failure to feed the world's growing population will spark civil unrest and starvation. A 60 percent gain in food prices since the start of 2007 has spurred riots in more than 30 countries.

Kraft Prices

Kraft, the maker of Kraft cheese and Kool-Aid drinks, said net income dropped 13 percent in the three months ended March 31, less than analysts estimated after they boosted prices to counter higher wheat and fuel costs.

Wheat for July delivery advanced as much as 15.75 cents, or 1.8 percent, to $8.9775 a bushel and traded at $8.8950 at 3:05 p.m. Singapore time. Still, futures are down 34 percent from a record $13.495 on Feb. 27 as farmers increased seeding.

Rice for July delivery was up 44 cents, or 2.2 percent, at $20.74 per 100 pounds. Rice reached a record $25.07 on April 24 after some exporters curbed exports.

To contact the reporter on this story: Jae Hur in Singapore at jhur1@bloomberg.net

Last Updated: June 16, 2008 03:09 EDT