Soybeans rose for third straight day as the government said U.S. farmers will harvest a smaller crop than expected this year after the hottest temperatures in 80 years cut yields.
Growers will harvest 2.692 billion bushels (73.3 million metric tons), down from 3.056 billion in 2012 and the lowest since 2007, the U.S. Department of Agriculture said today in a report. The average estimate of 29 analysts surveyed by Bloomberg News was 2.796 billion bushels. It was the largest August cut in production since at least 1974, USDA data show.
“It’s the third-largest downside surprise in history,” Richard Feltes, a vice president at R.J. O’Brien & Associates in Chicago, said in a note to clients today. “There’s a massive soy-rationing job ahead. The soybean market is likely to make new highs.”
Soybean futures for November delivery advanced 1.5 percent at $16.5625 a bushel at 9:47 a.m. on the Chicago Board of Trade. A close at that level would leave prices up 5.8 percent in three sessions, the biggest such gain since July 20.
Through yesterday, the most-active contract rose 30 percent since June 1 and reached a record $16.915 on July 23.
U.S. reserve supplies before next year’s harvest will total 115 million bushels, down from 130 million forecast a month ago, the USDA said. The surplus on Aug. 31 will total 145 million bushels, compared with 170 million estimated in July, according to the report.
Soybeans are the second-largest U.S. crop, valued at $35.8 billion in 2011, behind corn, government data show.