Soybeans Rise Toward 2-Year Highs

Soybean futures fell to around $11.2 per bushel, easing from a two-week high as a stronger US dollar and weaker oil prices outweighed expectations of Chinese demand. While the USDA reported 132,000 metric tonnes of US soybeans sold to China, overall buying pace remains slow and concerns remain that China may fall short of projected import volumes. Focus now turns on upcoming USDA crop condition reports next week for signs of stress in the US Midwest soybean belt. Recent heavy rainfalls have disrupted fieldwork, preventing timely fertilizer and crop treatments, raising concerns over potential yield impacts if wet conditions persist. Meanwhile, the US dollar strengthened after the latest Fed policy meeting reinforced bets of rate hikes this year, making US commodities more expensive for foreign buyers. Crude oil also dropped to its lowest level since the start of the Iran war after an interim deal raised expectations of improved supply flows and the reopening of the Strait of Hormuz.

Soybean futures climbed above $11.3 per bushel, hitting a two-week high on signs of renewed Chinese import demand, although favorable US crop weather limited further upside. Reports indicate Chinese buyers are looking to secure US cargoes for fourth-quarter shipment, though traders say no firm deals have been confirmed yet. Markets have been closely monitoring Chinese purchasing activity following the May announcement that China would buy $17 billion of US agricultural products annually, alongside an existing commitment of 25 million metric tons of soybeans. Meanwhile, widespread rain and warm temperatures across the US Midwest have generally benefited crop development over the past week, reinforcing expectations of adequate global supply. The USDA also rated 66% of US soybeans in good-to-excellent condition, up one percentage point from a week earlier. A sharp decline in crude oil prices after an outline US-Iran peace deal added further pressure on grain and oilseed markets.

Soybean futures traded below $11.2 per bushel, hovering near four-month lows as a tentative US-Iran peace agreement sent oil prices sharply lower. Oil prices dropped after US President Donald Trump and Iran’s deputy foreign minister said they had reached a tentative deal to halt hostilities and resume traffic through the Strait of Hormuz. Agricultural goods often track crude oil prices due to their link to biofuel demand from grains and oilseeds. Favourable US crop weather and higher South American production forecasts added pressure on prices, with the USDA last week raising its soybean production forecasts for Argentina to 50 million metric tons. Weak Chinese demand for US agricultural exports has further weighed on sentiment despite earlier expectations of large-scale purchases. Meanwhile, US soybean crush pace likely slowed for a third straight month in May as some processing plants were idled for seasonal maintenance and repairs despite historically large crush margins.