Soybean futures fell to a 2-year low

In the US, corn futures fell to a 3-year low and soybean futures fell to a 2-year low on Monday, as a sharp drop in oil prices negatively affected agricultural markets.

Soybean futures began to fall in price last week amid improving weather conditions in South America. That would hurt U.S. farmers planning to plant soybeans in the spring, but support ranchers buying soybeans and grain to feed their animals.

The strengthening of the coalition to fight Houthi attacks in the Red Sea reduced oil prices by 3%. Following them, the prices of corn, which is used in the production of ethanol, and soybean oil, which goes into the production of biodiesel, fell.

Yesterday on the exchange in Chicago, March futures for corn fell by 1.3% to the lowest level since December 2020 - $179.1/t, and for soybeans - by 0.9% to $457.6/t, which is the lowest since December 2021.

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

The market is awaiting the USDA's January report, due on Friday, but the USDA's representative in Brazil has already released its own estimate of Brazil's soybean crop at 158.6 million tonnes, beating local agencies' forecasts of 151-155 million tonnes, but below December's USDA forecast of 161 million tons.

The good condition of soybean crops in Argentina creates the conditions for a record soybean harvest in South America this year.