Soybean futures are trading at their best prices since June, driven by lower production estimates in Brazil and greater US export inspections. Soybean prices have eased since hitting this level last summer, but they could be on the rebound in 2022 amid strengthening demand and lower output.

March soybean futures advanced $0.3675, or 2.47%, to $15.2725 per bushel at 18:12 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean prices have risen about 14% year-to-date, making it one of the top assets of 2022 so far.

The biggest factor for soybean prices on Tuesday is the latest production estimates in Brazil. The South American country has been going through a drought, resulting in a reduction for many of the nation’s top commodities.

Estimates are around 120 million metric tons, below last year’s performance of 138 million metric tons.

Last month, the US Department of Agriculture (USDA) projected that soybean output for the 2021-2022 marketing season would be 139 million metric tons, down five million metric tons from the previous month’s estimate. It also slashed Brazil’s soybean yield estimate by 3% to 3.44 tons amid dry conditions.

Meanwhile, in separate data, the USDA reported that corn export inspections rose slightly more than expected in the week ending January 27. US government data show that wheat inspections fell to 361,375, corn inspections decreased to 1,035,734 tons, and soybean inspections climbed to 1,411,411 tons.

Private exporters reported greater soybean activity to China, with 132,000 metric tons out for delivery for the 2022-2023 marketing season.

Bob Linneman of Kluis Advisors stated:

“Further reduction to production estimates to start the week is continuing the trend. New targets for total soybean production now rest between 128.5 and 130 million metric tons. That is down from the preplanting targets of close to 145 million metric tons. Wheat prices gave up early-session gains to post a big outside day down. Prices closed below the prior-week low and below the 20-day average. The weakness in wheat put pressure on the old-crop corn contracts. March corn also had an outside day on the daily chart, with prices closing near the lows of the day.”

In other agricultural commodities, March corn futures added $0.095, or 1.52%, to $6.355 a bushel. March wheat futures jumped $0.075, or 0.99%, to $7.875 a bushel. March coffee futures edged up $0.009, or 0.38%, to $2.376 per pound.