Chinese Demand Lifts Soybeans To New Highs While Oils Correct

Soybean futures have pushed to fresh contract highs on the back of robust Chinese buying, even as the complex faces short‑term pressure from weaker vegetable oils and softer crude. Nearby CBoT soybeans ease slightly after the rally, but the demand backdrop into 2026/27 remains supportive, with China actively managing stocks ahead of heavy US arrivals. Soybeans, rapeseed and canola all benefit from firmer corn and wheat, while the vegetable oil leg turns corrective as soy oil and Malaysian palm oil retreat from last week’s spike. In China, repeated Sinograin auctions signal an effort to clear storage ahead of new US shipments. Physical FOB prices in China and Ukraine have edged lower in recent days, reflecting both the prior futures rally and the current consolidation. Overall, fundamentals point to a tight but not panicked balance going into the new US marketing year.

Prices

CBoT soybean futures reached new life-of-contract highs on Wednesday before slipping modestly, with the front November 2026 contract last around 1,260 USc/bu, down roughly 0.4% on the day. Soybean meal futures are firmer across the curve, adding about 0.5–0.8%, while soy oil futures correct by around 2% after recent gains.

Converted into EUR-based FOB indications, recent dashboard offers suggest Chinese origin yellow soybeans are trading near EUR 0.67/kg (conventional) and EUR 0.72/kg (organic), both slightly below last week, while Ukrainian FOB Odesa values hover around EUR 0.33/kg after a mild week-on-week decline. US No. 2 soybeans FOB remain steady near EUR 0.58/kg, indicating limited basis movement despite the futures rally.

Supply & Demand

The key driver of the current rally is sustained Chinese demand. The USDA confirmed a private sale of 333,000 tonnes of US soybeans to China for delivery in marketing year 2026/27, underlining forward demand and reinforcing the new highs in CBoT futures. At the same time, state trader Sinograin sold 223,000 tonnes of imported soybeans at auction, about three quarters of the volume offered, its fifth auction in less than a month.

These auctions aim to free up storage space for sizeable US soybean arrivals expected over the coming weeks. This behavior signals confidence in import flows and a preference to rotate older stocks rather than cut usage, which keeps the global demand outlook constructive. Spillover strength from corn and wheat further tightens the perceived feedgrain balance, supporting crush margins and meal demand.

Fundamentals & Spreads

Within the soy complex, the value distribution is shifting. Soybean meal futures are trading higher across the forward curve, reflecting resilient feed demand and possibly concerns about alternative protein supplies. Conversely, soy oil futures have turned lower by around 2% day-on-day, pressured by a parallel 2% decline in Malaysian palm oil and a broader correction in vegetable oils after last week’s strong rally.

Palm oil, despite the current pullback, still trades near its recent life-of-contract highs, but its relative price premium versus other oils has eroded demand. In Indian ports, soy oil prices have dipped below palm oil, reducing soy oil’s competitiveness and capping upside for the oil leg of the complex. This divergence supports a meal-led bull structure in the crush, even as flat-price soybeans consolidate below the recent peak.

Energy & Cross-Commodity Drivers

Crude oil prices have fallen for a third consecutive day, as traders react to reports that Iran and Oman agreed to set up a temporary joint sea route in the Strait of Hormuz and plan talks to negotiate a more permanent shipping corridor within 30–60 days. Softer energy values typically weigh on biofuel margins, indirectly limiting support for vegetable oils including soy oil.

Nonetheless, the cereals complex remains firm, with rising corn and wheat prices lending systemic support to oilseeds and protein meals. Rapeseed and Canadian canola have logged gains for a second session, recovering part of the heavy losses seen earlier in the month. In Canada, canola harvest progress continues but is intermittently slowed by rainfall, a minor supportive factor for nearby canola and, by extension, the wider oilseed complex.

USDA Export Expectations

The upcoming USDA weekly export report for the period to 20 August is a short-term catalyst. For the old-crop 2025/26 season, analysts expect soybean net cancellations of up to 200,000 tonnes or net sales of up to 200,000 tonnes, showing that the current marketing year is in its final balancing phase. For new-crop 2026/27, the market anticipates strong sales of 1.5–3.0 million tonnes, largely driven by Chinese buying.

For by-products, analysts look for soybean meal sales between 200,000 and 800,000 tonnes for both 2025/26 and 2026/27, and soy oil net sales ranging from small cancellations of 2,000 tonnes to purchases of up to 17,000 tonnes. Robust forward sales in beans and meal would confirm the tight underlying demand picture and could reignite the futures rally after the current consolidation.

Weather & Regional Outlook

Weather in key producing regions remains an important but secondary driver in the very short term, as markets focus more on demand and logistics. In North America, attention is on the late stages of the US growing season and early yield indications, while in Canada intermittent rains slow canola harvest but do not yet imply significant supply losses.

In South America, current conditions are largely off-peak for soybean production, with markets instead looking ahead to planting intentions and the potential impact of the next climate phase on the 2026/27 crop. Any shift toward adverse weather in Brazil or Argentina later this year would quickly translate into renewed risk premia in futures and firmer FOB basis levels.

Trading Outlook

• Producers: Use current strength and contract highs to advance incremental sales for 2026/27, especially where local basis is firm, while retaining some upside via options given strong Chinese forward demand.
• Importers/Crushers: Consider layering in forward coverage on soybean meal rather than soy oil, as meal is leading the complex and Chinese demand remains robust; take advantage of current softness in oils for short-term procurement.
• Traders: Watch today’s USDA export sales data closely; strong new-crop bookings, particularly to China, could trigger another leg higher in futures, while weak figures may extend the current consolidation towards recent support levels.

3-Day Price Indication

• CBoT Soybeans: Sideways to slightly lower bias as the market digests contract highs and awaits export data; intraday volatility likely around report release.
• FOB China (Beijing): Mildly softer to stable in EUR terms, reflecting the recent futures pause and active state stock rotation, but underpinned by strong import demand.
• FOB Black Sea (Odesa): Slight downside risk amid competitive pressure from US and Brazilian origins, though further declines may be limited by already compressed margins.