Rain helps increase soybean forecast

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CHICAGO — U.S. soybean production will be larger than forecast a month ago after rain helped to boost yield potential in the Midwest, the government said Thursday.

The harvest will total 2.86 billion bushels (77.84 million metric tons), up 8.6 percent from 2.634 billion estimated in August, the U.S. Department of Agriculture said in its second surveybased forecast for this year’s crop. The average estimate of 31 analysts surveyed by Bloomberg News was 2.763 billion bushels. A year ago, U.S. farmers harvested 3.094 billion bushels.

“Rains revived Midwest plants and boosted yields,” Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview before the report. “U.S. supplies are more comfortable, and South America is planting what should be a record crop.”

Soybeans for November delivery fell 1.7 percent to $15.2325 a bushel Wednesday on the Chicago Board of Trade. The most active contract has gained 21 percent since June 1, touching a record $17.89 on Sept. 4. Soybean meal, a high-protein animal feed, has gained 48 percent this year, touching a record $541.80 for 2,000 pounds on Sept. 4.

Soybeans and soybean meal have climbed the most this year among 24 commodities tracked by the Standard & Poor’s GSCI Index, outpacing gains in global equities and U.S. Treasuries.

Reduced supplies have cut margins for meat producers Tyson Foods Inc. and Smithfield Foods Inc., which buy soy-based animal feed. Higher costs for dairies, grain processors and livestock producers helped send global food prices in September to the highest since March, United Nations data show.

Oilseed processors such as Bunge Ltd. and Archer Daniels Midland Co. may benefit from a global shortage of animal feed. The central Illinois crush spread — the difference between the cost of a bushel of soybeans and the value of the meal and oil it can produce — is 86 percent higher than the average of the past four years. Yields were estimated at 37.8 bushels per acre, up from 35.3 bushels forecast in September and 41.9 last year, the USDA said.

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