Soya Market Squeeze: Weak China Demand, Bearish Trend, but Upside Risks

The global Soya market is currently under notable pressure, as futures contracts across key exchanges reflect a persistent downtrend, driven primarily by underwhelming Chinese buying and shifting positions among speculative investors. Despite recent USDA-announced export sales to China and unknown destinations, these volumes were insufficient to counter the prevailing pessimism rooted in the ongoing shortfall of large-scale Chinese procurement. Support from fundamental drivers remains fragile—even as a recent uptick in crude oil prices injected some buoyancy into the oilseed complex, propelled by geopolitical turbulence surrounding U.S. sanctions on Venezuela and potential restrictions on Russian energy. Additionally, major competing oilseeds (Canola and Palm) exhibit their own supply/demand frictions, with Canadian Canola challenged by reduced export opportunities to China and Malaysian Palm traders wary of weak export flows and swelling stocks.

Diversion in speculative positioning has added to the complexity: CFTC data shows a modest increase in net long positions for US soybean futures, but this sits against a backdrop of waning physical demand and tempered farmer selling in Canada. Weather in the Americas and Eastern Europe will set the tone for the remainder of the season, while logistics and geopolitical uncertainty keep risk premiums on the table. With soya prices near recent lows in key Asian and US markets—and physical offers from China, the US, and India diverging—informed market participants must weigh short-term pressure against the potential for recovery should export flows or energy markets shift.

📈 Soybean Market Prices Overview

Exchange	Product	Latest Price	Weekly Change (%)	Market Sentiment
CBOT	Soybeans Jan ’26	1,049.50 US-Cent/bu	-0.26	Bearish
CBOT	Soyoil Jan ’26	48.15 US-Cent/lb	+0.08	Neutral-to-Weak
CBOT	Soymeal Jan ’26	297.40 USD/short ton	-0.34	Weak
DCE	Soybeans Jan ’26	4,049 CNY/t	-1.06	Bearish
Physical CN	Yellow, organic (FOB)	0.76 EUR/kg	+1.3	Stable
Physical CN	Yellow, conventional (FOB)	0.69 EUR/kg	+1.5	Stable
Physical US	No. 2 (FOB)	0.47 EUR/kg	+4.4	Soft Recovery
Physical IN	Sortex clean (FOB)	0.87 EUR/kg	+2.4	Firm
Physical UA	Origin (FOB)	0.34 EUR/kg	-2.9	Bidding Lower

🌍 Supply & Demand Conditions

• China’s Demand: Large scale Chinese buying remains well below expectations. The latest USDA reports confirm only modest private sales (198,000 t to China, 125,000 t to unknown).
• US Production/Exports: US soybean inventories remain relatively high, with farmer sales muted and crushing margins supported by domestic meal/oil demand.
• Brazil & Argentina: Weather remains mostly favorable in Brazil, supporting a large crop; some dryness in Argentina is being watched, but crop potential remains above average.
• Ukraine/EU/Black Sea: Ukrainian soybean and rapeseed output remains steady, with winter crop-developments suggesting stable European oilseed supplies for 2026.
• Speculative Positioning: CFTC and Euronext data signal an increase in long exposure, but without matching commercial demand, leaving markets vulnerable to liquidation.

📊 Market Fundamentals & External Drivers

• USDA & Export Reports: Recent private sales offered some temporary reprieve, but overall trade flows continue to lag seasonal norms.
• Energy & Oil Markets: Crude oil volatility (due to U.S.-Venezuela and U.S.-Russia sanctions) is lending modest support to the oilseed complex when prices spike—however, risk of a retreat if energy markets weaken again.
• Competing Crops: Canadian Canola prices have dropped nearly 10% since late November; sluggish export and soft farmer selling resemble the situation in soybeans.
• Palm Oil: Malaysian palm oil is range-bound, pressured by weak exports and high stocks; provides an indirect cap on global vegoil prices.

⛅ Weather Outlook for Key Growing Regions

• US Midwest: Mild winter weather and moisture are supporting winter wheat establishment, not currently threatening soybean outlook for next year.
• Brazil (Mato Grosso, Paraná): Slight dryness in northern and central areas; showers are forecasted for the next 7 days, critical for early pod-fill. No threat of severe heatwaves expected short term.
• Argentina (Buenos Aires, Cordoba): Recent rains have improved soil moisture, but ongoing monitoring is essential as periods of dryness recur.
• Black Sea/Ukraine: Normal winter weather, no current risk of significant winter kill for rapeseed—soya unaffected at this stage.

🌎 Global Production & Stock Comparisons

Country	2024/25 Production (Estimate, mln t)	2024/25 Ending Stocks (mln t)	YoY Change
USA	113.6	9.2	-4%
Brazil	157.7	32.1	+2%
Argentina	51.0	4.3	+6%
China	20.6	30.4	-1%
EU	2.7	1.1	Unch.
Ukraine	4.2	1.25	+5%

📌 Trading Outlook & Key Recommendations

• Short-term price pressure persists unless China returns with larger purchases.
• Watch for further developments in the US-China trade relationship and potential easing of Chinese import tariffs.
• Monitor South American weather: rainfall in Brazil and Argentina in the next 2 weeks key for 2025/26 crop sizes.
• Speculators should watch CFTC positioning closely for potential liquidation risk if global macro sentiment softens.
• Physical market participants in Asia may see opportunities for spot buying at current low levels, but risk remains if export flows increase suddenly.

📆 3-Day Regional Price Forecast

Exchange/Origin	Latest Price	3-Day Range (Forecast)	Bias
CBOT Soybeans (Jan 26)	1,049.50 US-Cent/bu	1,035 – 1,060	Downside risk
DCE Soybeans (Jan 26)	4,049 CNY/t	4,000 – 4,090	Ranging/Bearish
FOB CN (organic)	0.76 EUR/kg	0.75 – 0.77	Stable to Soft
FOB US (No. 2)	0.47 EUR/kg	0.46 – 0.48	Stable
FOB IN (sortex)	0.87 EUR/kg	0.86 – 0.88	Stable/Firm