FX.co ★ Soybeans Retreat from Mid-December Highs

Soybean futures have dipped below $10.65 per bushel, pulling back from their peak since mid-December. This adjustment comes as the market navigates the dynamics of a stronger US dollar and abundant supply from South America, weighed against persistent weather-related concerns. The US dollar, recovering from its recent decline, has curtailed commodity demand, thereby limiting upward movement despite still-tight nearby spreads. On the supply front, predictions of a record harvest in Brazil are restraining price increases. Brazil is anticipated to lead global exports through the first half of 2026, driven by competitive pricing and plentiful stock. Meanwhile, demand indicators are showing variability; China is expected to continue prioritizing Brazilian exports despite having satisfied a substantial portion of its US purchasing targets following the late-October trade agreement. Simultaneously, hot and dry weather across key agricultural areas in Argentina is being closely monitored, providing some support amid fears of potential yield reductions.