Soybean futures extended their rally to kick off the trading week, with prices touching their best levels in more than four years. A weaker US dollar, slumping domestic output, and strengthening foreign demand are the ingredients for a recipe of substantial gains for the crops. Is $12 the next stop for soybean prices before ringing in 2021?

January soybean futures tacked on $0.1075, or 0.93%, to $11.6425 per bushel on the Chicago Board of Trade (CBoT). Soybeans are coming off a noteworthy 4% weekly gain, adding to their year-to-date rally of 22%.

According to the US Department of Agriculture (USDA), more than 2.2 million tons of soybeans were inspected before shipment, most of which were destined to China. This is an important metric because it gives insight into how much soybean is being exported from the US.

In a separate report, the USDA forecast that domestic production and ending stocks will be lower in the 2020-2021 marketing year. The USDA anticipates that soybean production is expected to slide to 4.17 billion bushels, while ending stocks will slide to a seven-year low of 190 million bushels.

A monthly report from the US Census Bureau shows that American exports of soybeans to China are at their best levels in close to three years. US exports to Beijing were up 34% in September compared to the same period a year ago. And market observers do not think the exports will slow down, forecasting a surge of 472%.

The greenback supported the broader agricultural commodities market on Monday. The US Dollar Index, which measures the greenback against a basket of currencies, slipped 0.16% to 92.49. A lower buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.

In other agricultural markets, December corn futures added $0.0325, or 0.78%, to $4.195 per pound. December wheat futures tacked on $0.0275, or 0.46%, to $6.0075 a bushel. January coffee futures shed $0.0025, or 0.21%, to $1.185 per pound.