Chicago soybeans bounced back on Monday, with higher oil prices underpinning the oilseed which is increasingly being used to make alternative fuels amid tight energy supplies following the Iran war. According to Reuters, the most-active soybean contract on the Chicago Board of Trade (CBOT) rose 0.1% to $11.88-1/4 a bushel, as of 0013 GMT, having closed lower in the past session. Oil prices rose more than 2% in early trading on Monday after Israel ordered troops to move further into Lebanon in the battle with the Iranian-backed Hezbollah militant group, despite a ceasefire announced more than six weeks ago. The global soybean market, valued at over US$190 billion in 2024, continues to be dominated by major producers including Brazil, the United States, and Argentina, who collectively account for over 80% of worldwide production.
Wheat was flat at $6.10-1/2 a bushel and corn lost 0.1% to $4.46-1/2 a bushel, as reported by Reuters. The stepped-up fighting, coming just after the U.S. hosted Israeli-Lebanon peace talks in Washington on Friday, dimmed expectations that the U.S. and Iran could soon announce an extension to their ceasefire agreement. Soybean futures often track crude oil prices, as it is commonly used as feedstocks for biofuels. The global soybean market's importance extends far beyond commodity trading, touching countless aspects of daily life from tofu and plant-based proteins to animal feed and biofuels.
Crop-friendly weather in the U.S. Midwest has pushed prices lower as market players await the U.S. Department of Agriculture's weekly crop progress report on Monday, according to Reuters. Wheat faced pressure from the upcoming Northern Hemisphere harvests, while the U.S. crop has suffered irreparable damage from drought, though many other countries are on track for good crops. Agriculture consultancy Sovecon raised its forecast for Russia's 2026 wheat crop to 90.3 million metric tons from 89.7 million tons seen earlier, citing favourable moisture reserves. The global soybean market's expansion was driven by technological advances in processing, growing demand for animal feed, and the development of more efficient farming methods.
India forecast an El Nino-weakened monsoon in 2026 that will bring the lowest rainfall in 11 years, fuelling concerns over crops, food prices and growth in the world's fifth-largest economy, battling inflationary pressures from the Iran war, as reported by Reuters. The monsoon forecast adds to market uncertainty as India is a major agricultural producer and consumer. The history of soybean cultivation dates back over 5,000 years to ancient China, where it was first domesticated and considered one of the five sacred grains. The crop's global journey accelerated in the 20th century, transforming from a regional Asian staple into a global commodity.
