July 7 (Bloomberg) -- Corn plunged by the daily maximum, extending losses for a second day, on speculation that warmer weather will improve crop conditions in the U.S. Midwest after the worst flooding in 15 years.

The National Weather Service's six to 10-day outlook issued yesterday showed above-normal temperatures in the U.S. Midwest, including Iowa, Illinois, Indiana and Ohio. About 61 percent of the crop was in good or excellent condition on June 29, up from 59 percent a week earlier as warmer temperatures boosted growth. That compared with 73 percent a year earlier.

``The forecast for mostly warmer weather in the Midwest will help develop U.S. crops in the coming days,'' Takaki Shigemoto, an analyst at commodity broker Okachi & Co., said by phone from Tokyo. The U.S. is the world's top producer and exporter of corn and soybeans.

Corn for December delivery fell 30 cents, or 3.9 percent, to $7.47 a bushel in after-hours trading on the Chicago Board of Trade by 12:42 p.m. London time. Futures, which rose to a record $7.9925 on June 27, have more than doubled in the past year as global reserves are forecast to fall to a 24-year low by the end of August.

Rising demand from China, the world's most populous nation, is expected to buoy corn prices, according to Roland Jansen, chief executive officer of Mother Earth Investments AG.

``We do not think China is self-sufficient anymore,'' Jansen said in a Bloomberg Television interview. ``Because of climate change, and because of this fantastic economic engine, China will be forced to purchase huge amounts of grain from the western world, from Argentina, Brazil, Canada or United States, within the coming 12 months.''

Soybeans Fall

The Chicago exchange resumed trading after closing on July 4 for the U.S. Independence Day holiday.

About 58 percent of the soybeans got the top crop condition ratings, compared with 57 percent a week earlier and 68 percent a year ago, the U.S. Department of Agriculture said June 30.

Soybeans for November delivery dropped as much as 43 cents, or 2.6 percent, to $15.88 a bushel and last traded at $15.9150. The most-active contract has gained 83 percent in the past year, reaching a record $16.3675 on July 3.

Wheat for September delivery lost as much as 30.50 cents, or 3.4 percent, to $8.57 a bushel and last traded at $8.6175. Prices have fallen 36 percent from a record $13.495 set on Feb. 27 on speculation that global output will increase.

Milling wheat for November delivery on the Euronext.liffe exchange in Paris fell 5.50 euros, or 2.7 percent, to 198 euros ($310) a ton.

Australian Rain

Western Australia may get some rain in the coming week and the east of Australia will likely also receive showers, the National Climate Center said. Rain is critical in the coming months to bolster yields after farmers sowed a record acreage of wheat this season.

Rainfall of up to 25 millimeters may arrive in the cropping regions of Western Australia, said Shoni Dawkins, a climatologist with the center. Victoria and New South Wales may receive between 15 and 25 millimeters, he said. Australia is forecast to become the world's third-largest wheat exporter.

To contact the reporters on this story: Jae Hur in Singapore at jhur1@bloomberg.net; Marianne Stigset in Oslo at mstigset@bloomberg.net

Last Updated: July 7, 2008 07:53 EDT