June 27 (Bloomberg) -- Corn climbed to a record for a second day on concern that more rain and flooding in the U.S. Midwest may hurt crops, and as demand for commodities increased as a hedge against inflation.

Parts of northeast Missouri were drenched by more than 8 inches (20 centimeters) of rain over the past three days, and more storms are forecast, according to a report yesterday by the National Weather Service.

``It's again the weather effect,'' Han Sung Min, a manager at the international marketing department of Korea Exchange Bank Futures Co., said today in Seoul. ``Farmers might have delayed planting, and some switched to soybeans,'' he said, referring to a possible reduced acreage estimate for corn in a report by the U.S. Department of Agriculture scheduled for June 30.

Corn for December delivery rose as much as 1.4 percent to a record $7.9925 a bushel and was at $7.9575 a bushel as of midday in London, in after-hours trading on the Chicago Board of Trade. Prices gained 33 percent this month, becoming the best performer in the UBS Bloomberg CMCI index of 26 commodities.

Cities on the Mississippi were already battling the worst floods in 15 years before this week's soaking. Since mid-May, storms and severe weather flooded more than 3.4 million acres (1.38 million hectares) of land and caused billions of dollars of damage to crops.

The flooding wiped out more than $8 billion of this year's crops, according to the America Farm Bureau Federation. For at least the next decade, farmland along the Mississippi River and its tributaries may require more fertilizer to make the soil rich enough to maintain yields, said Jerry Hatfield of the U.S. Department of Agriculture.

Commodities Demand

Corn also advanced on speculation that the U.S. Federal Reserve will fail to keep inflation in check, after keeping the benchmark interest rate unchanged at 2 percent this week, boosting investor demand for commodities as a hedge.

Corn has more than doubled in the past year on increased demand for livestock feed and grain-based alternative fuels. Global reserves are forecast to fall to a 24-year low by Aug. 31.

Feed millers in the Philippines may import corn as the grain output in the Asian country in the third quarter may drop more than forecast because of high fertilizer costs.

Production from July to September may be between 10 and 15 percent below the government forecast of 2.51 million metric tons, Assistant Agriculture Secretary Dennis Araullo said today in a telephone interview from Iloilo City in central Philippines. The government in May forecast output to fall 1 percent from 2.54 million tons a year earlier.

Wheat, Soybeans

Soaring corn strengthened speculation that livestock producers worldwide will use more wheat in animal feed, sending the price of the grain higher in Asian trade.

Wheat for September delivery rose 7.25 cents, or 0.8 percent, to $9.50 a bushel as of midday in London. It also gained on speculation that demand for U.S. grain may increase after dry weather was forecast for parts of Australia.

Prices are still below a record $13.495 reached on Feb. 27 as global production is forecast to increase after farmers plant more to take advantage of high prices.

World wheat output will grow to a record 658 millions tons in the 2008/09 season, up from the 650 million tons in the May estimate and 608 million tons a year earlier, the International Grains Council said in a report yesterday.

Soybeans for November delivery increased 11.75 cents, or 0.8 percent, to $15.7325 a bushel as of midday in London. The price has jumped 96 percent in a year, reaching an all-time high of $15.865 on March 3.

To contact the reporter on this story:
Aya Takada in Tokyo  atakada2@bloomberg.net

Last Updated: June 27, 2008 07:05 EDT