Soybean prices rise to six-month high

International soybean prices have risen. On January 23, the Chicago Mercantile Exchange futures price (main contract), which is an international indicator, once reached the range of 10.5 to 10.9 US dollars per bushel, setting a six-month high since late July 2024. The reason behind this is that concerns about trade frictions between China, the largest soybean importer, and the United States, the main exporter, have eased. In addition, due to poor weather in major producing areas, there are concerns about reduced supply.

Soybean prices once reached a four-year low in mid-December 2024, and before Trump took office as US President, they had been hovering in a low price range of around US$10 per bushel. Trump had advocated imposing high tariffs on China in his campaign promises, which triggered concerns about the re-emergence of the trade war, which created downward pressure on the market.

Contrary to expectations, Trump did not sign the additional tariff presidential order that was believed to be signed on his first day in office (January 20). There is a view in the market that Trump’s tough attitude towards additional tariffs has softened. The market believes that the major impacts previously expected, such as a sharp reduction in US soybean exports, can be avoided, and this view has led to the rise in soybean prices.

Concerns about weather conditions in Argentina, a major producer, are also a major factor in the price increase. Argentina’s Rosario Grain Exchange announced on January 17 the impact of dryness and reduced rainfall on crops. Although no specific figures were mentioned, soybean production is expected to be lower than in previous years in 2024-2025.

Green County head Naoyuki Ohmoto pointed out that Brazil’s continued rainy weather may delay harvesting, which has also led to concerns about reduced supply. He believes that “the price increase this time is the result of a combination of factors, and the chart also shows that it has broken away from the downward trend.”