Soybean futures fell to 2-year low

In the United States on Monday, corn futures fell to a 3-year low and soybean futures fell to a 2-year low as a sharp decline in oil prices negatively impacted agricultural markets.

Soybean futures began to fall last week amid improving weather conditions in South America. This will hit U.S. farmers who are planning to plant soybeans in the spring, but will support livestock producers who buy soybeans and grain to feed their animals.

The strengthening of the coalition to fight Houthi attacks in the Red Sea has reduced oil prices by 3%. They were followed by falling prices for corn, which is used in the production of ethanol, and soybean oil, which is used for biodiesel production.

Yesterday on the Chicago stock exchange, March corn futures fell 1.3% to the lowest level since December 2020 – 179.1 $/t, and soybeans – 0.9% to 457.6 $/t, the lowest since December 2021.

Amid dry weather in Brazil in November and December, analysts have significantly reduced the forecasts of soybean production, but now the intensity of the rains has increased, so the crop estimates are returning to record levels.

Market is waiting for the January USDA report, which will be released on Friday, but the representative of the USDA in Brazil has already released its own estimate of soybean crop in Brazil at 158.6 million tons, which exceeds the forecasts of local agencies in the range of 151-155 million tons, but inferior to the December USDA forecast of 161 million tons.

Good condition of soybean crops in Argentina creates the preconditions for a record soybean crop in South America this year.

Tags: corn, prices, soybean