Soybeans hit all-time high, closes in on $18

Soybean prices notched a new record high of nearly $18 per bushel on Tuesday as money managers jumped into the market at the start of the month on tight supplies after the worst US drought in 56 years devastated the crop.

"We have new money coming in at the beginning of the month, rumours of China buying and low yield reports...there's bullish news everyday," said Jason Roose a co-owner of US Commodities, Des Moines, Iowa.

Spot soybeans hit an all-time high of $17.94-3/4 per bushel, above the previous high of $17.80-3/4 hit just last week.

The market was also supported by continued strong demand from China, the world's top buyer of soybeans and signs of depleting supplies in Brazil, the world's second largest exporter of the oilseed after the United States.

"We're stuck with tight stocks and voracious Chinese demand and we're seeing some technical buying," said Sterling Smith, market specialist for Citigroup.

Wheat also gained on early month commodity fund buying and corn rose one percent on persistent reports of very low yields in the drought-stricken early harvest of the US Midwest crop.

Spot soybeans have jumped 33 percent in just two

months and spot corn is up nearly 50 percent since early June. Corn prices hit a record in late August of nearly $8.50 per bushel.

Soybean ending stocks are forecast by the US government to fall next summer to the lowest in almost a decade.

"We've seen some demand rationing for corn but not for soybeans," Roose said.

Some analysts are expecting soybean stocks to fall to a 32 year low in data to be released next week by the US Department of Agriculture in its September supply/demand report.

"The ongoing story of Brazil's supplies being depleted are supportive to soybean prices too," Smith said.

Brazil, Argentina and the United States account for nearly all of the world's soybean exports.

"We are still pricing in tight soybean supplies going

forward," said Victor Thianpiriya, agricultural commodity strategist at ANZ in Singapore.

"Exports from Brazil have dropped sharply which goes to show that they are running out of beans and it means a lot more demand for US beans."

Brazilian exports of soy tumbled in August after surging the previous month, data from the trade ministry showed on Monday.

At 10:04 am CDT (1504 GMT) Chicago Board of Trade(CBOT)

September soybeans were up 19 cents at $17.83-1/2, new-crop November was up 21-3/4 at $17.78-1/4, December

corn was up 14-3/4 at $8.14-1/2 and December wheat was up 12-1/2 cents per bushel at $9.02.

The wheat market was supported by strong global demand with Egypt, the world's biggest importer, buying 355,000 tonnes of Russian, Ukrainian and Romanian over the weekend.

Black Sea wheat has been sought after over the past few

weeks, boosting expectations that Russia will curb exports amid dwindling domestic supplies, although the government denied on Friday it was planning to limit sales.