Chicago Board of Trade (CBOT) soybean futures fell to fresh contract lows on Thursday, driven by significant agricultural trade agreements between Brazil and China and favorable weather conditions in South America for both soy and corn crops. Analysts noted that these factors have heightened expectations for large harvests.
Corn futures also weakened, while wheat prices eased slightly. However, concerns over escalating tensions in the Black Sea region, particularly following reports of Russia launching intercontinental ballistic missiles (ICBMs) at Ukraine, limited the decline in wheat prices.
Most soybean contracts reached life-of-contract lows, as the trade deals between Brazil and China suggested a closer relationship that could negatively impact U.S. soybean demand, according to Don Roose, president of U.S. Commodities.
The positive weather conditions in South America have fueled optimism for substantial corn and soybean yields. Meanwhile, fears surrounding potential tariffs from the incoming administration of U.S. President-elect Donald Trump have added to market uncertainty. Jim McCormick, co-founder of AgMarket.Net, remarked, “I think the market is still unnerved about the new president’s administration,” highlighting historical concerns that tariffs often do not favor American agriculture.
Wheat prices received some support due to military escalations in Ukraine, with the most-active wheat contract settling down 2-3/4 cents at $5.69-1/2 per bushel.