The situation you described is very common in the Marine industry and it is referred to as the engine "Making Oil". In reality it is not making oil but picking up moisture over time and it gets worse the longer the engine goes without running and the higher the humidity is in your area. The enemy of combustion engines is moisture and running the engine on a regular basis is the best long term cure for preventing the making oil problem. You could run the engine for a while and the moisture will gradually go away, but the water also degrades the quality of your oil and its lubricity, so I would change the oil and your oil filter; another place that gathers water and moisture, and run the engine for a while to see if the oil level remains constant. If it does not, then you have other problems.
The person or persons who sold you the Kubota should have changed the oil and the filter before they sold it to you if it had set a long time. If you have further problems I would go back to them and explain that the oil had water in it. I would also check and probably replace any hydraulic fluids and filters if you decide to keep it. I would also take a look at your fuel filter, another place that gathers water and gunk when the engine is not run for a long time.