June 13 (Bloomberg) -- Corn climbed for an eighth day in Chicago, heading for the biggest gain in 11 weeks, on speculation that flooding in some U.S. Midwest states will damage crops in the world's biggest producer and exporter.

``Damage from flooding appears likely to reach hundreds of millions of dollars,'' the National Weather Service said in a report on its Web site. ``Roads and bridges have been shut down, crops have been damaged, and officials in some areas fear the worst flooding since 1993.''

Corn jumped 9.1 percent this week, the second straight weekly advance and the biggest such gain since March 28. July delivery rose as much as 13 cents, or 1.8 percent, to $7.22 a bushel in after-hours trading on the Chicago Board of Trade and stood at $7.10 as of midday London time. Prices reached a record $7.255 yesterday.

``Now the $8 a bushel level for corn prices is within sight,'' Kenji Kobayashi, an analyst at Kanetsu Asset Management Co., said by phone from Tokyo. ``The flood situation in the Midwest appears to be very serious.''

Corn production will fall 10 percent to 11.7 billion bushels from 13.1 billion a year earlier, the U.S. Department of Agriculture said June 10. Inventories on Aug. 31, 2009, will be 673 million bushels, the lowest since 1996 and down 53 percent from 1.4 billion forecast this year, the agency said.

Crop Damage

The U.S. government cut its corn yield forecast to 149 bushels an acre from 154 estimated last month and 151 from last year's crop. The reduction reflects ``persistent heavy rainfall across the Corn Belt,'' the USDA said.

About 60 percent of the corn crop in the U.S. was in good or excellent condition as of June 8, down from 63 percent a week earlier, the USDA said June 9. A year earlier, 77 percent got the highest rating. Some 89 percent of the seeds had emerged from the soil, compared with 98 percent a year earlier.

The most-active corn price has surged 83 percent in the past year on demand for livestock feed and grain-based fuel.

The market may see a technical correction later today as it appears to have been heavily overbought, Kobayashi said. Corn's 14-day relative strength index, a gauge of momentum, has held above 70 since June 10, signaling prices may decline.

CME Group Inc. said June 11 in a notice on its Web site that it increased the margin requirement for investors in corn and soybeans and raised the limits on price swings of the two commodities and wheat, effective from yesterday.

Soybeans Gain

Soybeans for July delivery were down 1.75 cents at $15.3475 a bushel as of midday London time after trading between $15.305 and $15.465. The price rose 1.3 percent yesterday after touching $15.4675, the highest since March 5.

Soybeans reached a record $15.865 on March 3 on increased demand for animal feed and vegetable oils made from the oilseed.

Wheat for July delivery fell 9 cents, or 1.1 percent, to $8.42 a bushel as of midday London time after gaining 2.1 percent yesterday on speculation that yields are better than normal as the U.S. winter-crop harvest progresses in states from Texas to Kansas.

Wheat futures are down 38 percent from a record $13.495 on Feb. 27 as farmers increased seeding of the grain.

Milling wheat for August delivery rose 3 euros, or 1.5 percent, to 205.50 euros ($315) a metric ton on the Liffe exchange as of 1:51 p.m. in Paris.

Rice for July delivery was up 0.4 percent at $19.885 per 100 pounds as ofmidday London time after losing 0.7 percent yesterday. Rice reached a record $25.07 on April 24 after some exporters curbed exports to ensure local supplies.

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

Last Updated: June 13, 2008 07:57 EDT