(Bloomberg) -- Soybean futures capped the longest rally in 40 years after top buyer China stepped up purchases and the outlook for this year's U.S. crop deteriorated.
Futures traded in Chicago rose for a 12th consecutive session, the longest rally for a most-active contract since 1980. China stepped up purchases in recent months to meet demand from a hog industry that's recovering faster than analysts expected. American sales from the new crop to the Asian nation are running at the fastest pace in seven years, U.S. Department of Agriculture data show.
Increased purchases come at a time when the outlook for this year's U.S. harvest is worsening after a drought hurt crops. There are also concerns about potential frost damage to soybeans in the Midwest, according to CHS Hedging. The USDA also announced a flash sale to China of 238,000 metric tons on Wednesday.
“Soybean prices were bolstered by two large export sales reported this morning, as well as some mild concerns over frost that landed on some upper Midwestern fields earlier this week,” Farm Futures senior editor Ben Potter said in a report.
Soybean futures for November delivery rose 0.6% to close at $9.7875 a bushel, while corn and wheat declined. Crop conditions have worsened and now analysts expect the USDA to trim its forecast for soybean yields by 3% when it publishes its widely watched monthly supply report on Friday.
“Our latest round of feedback from the field updates shows soybean growers have been battling a bevy of in-season challenges, from weeds to overly dry conditions to even frost earlier this week,” Potter said.
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