COMMODITIES-Soybeans at record high; oil up for 6th day
* CRB index at 2-1/2 month highs on broad commodities rally
* Soy at record high on fear it will wither next after corn
* Syrian violence and Iranian tensions help oil (Updates with record high in soybeans)
By Barani Krishnan
NEW YORK, July 18 (Reuters) - Soybeans hit record highs on Wednesday on fear that it will be the next to wither after corn from the worst U.S. drought in 56 years, while oil markets climbed for a sixth day on escalating violence in Syria and tensions over Iran.
Federal Reserve Chairman Ben Bernanke's testimony to Congress that he did not expect the United States to lurch back into recession also assured some investors that demand for oil may not tumble even with the U.S. economy remaining sluggish.
The Thomson Reuters-Jefferies CRB index, a benchmark for commodities, rose 1.2 percent to touch a 2-1/2 month high after 15 of its 19 components settled in positive territory.
Natural gas led the CRB's gains as the market rose more than 6 percent in response to the heat wave across America that was boosting demand for cooling. Agricultural markets from soybeans to corn and live cattle jumped about 2 percent or more.
A surge in Wall Street stocks also aided industrial commodities such as copper.
"Equity markets turning solid is probably the best thing that is working for the copper market," said Sterling Smith, vice president of commodity research at Citibank's Institutional Client Group in Chicago.
U.S. soybeans rallied to all-time peaks on fear that the hottest crop weather since 1956 -- which has devastated corn -- would decimate soybeans next.
"It's soybeans' turn," Don Roose, grains analyst at U.S. Commodities, said. "The next two weeks will be critical for them."
Soybean planters had been anticipating more moisture to avert the kind of catastrophy that had affected corn. Drought in South America has already devastated the soy crop in Brazil and Argentina, the world's second and third largest exporters, making it imperative that soy top harvester the United States avoid further damage to yields.
"So far it's been uh-oh, there's been no change in the weather forecast. A huge shortage of soybeans is a real possibility," Roose said.
The spot soybean contract on the Chicago Board of Trade rose 2.7 percent to an all-time high of $16.85-1/2 a bushel, surpassing the previous record of $16.79-1.2 set just last week. New-crop November rose 2 percent to $16.48 per bushel.
Soymeal futures rose 4 percent to close at an all-time high, at $5.14 per ton, as feed supplies in the United States eroded with the shrinking corn crop. Supplies of the alternative feed, distillers' dried grain, have also tumbled with the slowing of ethanol production on the back of high corn prices.
"The soymeal basis has gone up $7 (per ton) in a week," said grains analyst Charlie Sernatinger at ABN Amro in Chicago. "And the shorts are getting squeezed out of the August (contract)."
U.S. corn rebounded from early profit-taking to extend its biggest rally since 2008, climbing more than 1 percent to add to a 50-percent summer rally triggered by the worst drought in 56 years that continues to shrink the crop.
CBOT spot September corn settled up 2 percent at $7.95 a bushel after setting a new 13-month high at 7.97, close to the record high of $7.99-3/4 set last summer.
OIL MARKETS WATCH SYRIA, IRAN
Oil prices rose for a sixth straight session after news that Syria's defense minister and President Bashar al-Assad's brother-in-law and a top general were killed in a suicide bomb attack.
The seriousness of tensions with Iran was highlighted when U.S. Defense Secretary Leon Panetta said the United States will hold Tehran directly responsible for any attempt to disrupt shipping in the Gulf region and will be able to defeat any Iranian attempt to shut down seaborne commerce.
U.S. crude oil's front-month contract settled up 0.7 percent, or 65 cents, at $89.80 a barrel.
London's benchmark Brent crude closed up 1.1 percent, or $1.16, at $105.16 a barrel.
U.S. gasoline futures also rose by more than 1 percent after the government's weekly oil inventory report showed gasoline stocks fell against expectations for a rise.
Prices at 7:08 p.m. EDT (2308 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG US crude 89.90 0.03 0.0% -9.0% Brent crude 0.00 0.00 0.0% -100.0% Natural gas 2.973 0.000 0.0% -0.5% US gold 1571.90 -18.70 -1.2% 0.3% Gold 1572.59 0.62 0.0% 0.6% US Copper 347.40 1.85 0.5% 1.1%
Dollar 0.000 0.000 0.0% -100.0% CRB 299.080 3.440 1.2% -2.0% US corn 783.25 11.50 1.5% 21.2% US soybeans 1620.00 29.50 1.9% 35.2% US wheat 916.50 13.50 1.5% 40.4% US Coffee 182.15 0.30 0.2% -20.2% US Cocoa 2204.00 9.00 0.4% 4.5% US Sugar 23.06 0.10 0.4% -0.7% US silver 27.095 -0.221 -0.8% -2.9% US platinum 1403.20 -16.50 -1.2% -0.1% US palladium 577.55 -5.80 -1.0% -12.0% (Editing by Phil Berlowitz and Diane Craft)
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