Soybean futures jumped to the highest since June 2018 as the United States Department of Agriculture reported lower estimates for domestic soybean production.
The most-active soybean contract settled $0.185 higher at $9.96/bushel after rising to $9.98, the latest in a series of highs since June 2018.
In its latest report, the USDA said U.S. soybean and corn production will be smaller than previously forecast due to unfavorable weather conditions last month, and traders expect inventory estimates may tighten due to even lower harvest forecasts and higher exports.
The USDA sees soybean production for the 2020-21 marketing year at 4.3B bushels, down 112M bushels from the previous forecast, with its yield forecast down 1.4 bushels per acre from the August forecast to 51.9 bushels per acre.
The USDA also forecasts U.S. exports of 2.125B bushels for 2020-21, up from 1.68B bushels in the previous marketing year which would lead to higher usage and lower supply in the U.S.
According to the President of Iowa-based broker,U.S. Commodities Don Roose, The trade believes that the yields are going to continue to fall and it is a major concern to investors and buyers underneath the market inclusive of China is one of the big buyers of U.S. soybeans and corn.