Soybean Market Faces Supply Squeeze Amid Acreage Drop and Farmer Diversification

The global soybean market is entering a new phase as acreage in India, one of Asia’s leading producers, contracts in response to continuous price pressures and shifting agronomic priorities. The latest season has been shaped by a 5% anticipated drop in sown area, with Indian farmers in Madhya Pradesh, Maharashtra, and other key states pivoting towards crops promising better returns, such as corn and cotton. This move is a direct consequence of two consecutive years of underwhelming soybean prices, even as the government raised the minimum support price (MSP) by around USD 5.25 to USD 64.15 per quintal for the 2025 kharif season. However, actual market prices across major wholesale markets still fall notably below the MSP, further dampening producer sentiment.

Timely and sufficient monsoon rains have allowed sowing to proceed at pace, though germination problems in Maharashtra and Madhya Pradesh resulted in localized replanting efforts. This environment of weakened farm-level returns, but stable production economics due to monsoon reliability, signals a mixed outlook for supply but persistent headwinds for market momentum. Internationally, FOB prices remain generally stable, with some incremental gains reported in key hubs such as Beijing and New Delhi. Market participants face the dual challenge of managing uncertain yields against the backdrop of robust but stagnant demand, while weather and global trade flows will be watched closely for their influence on price direction.

📈 Prices

Origin	Type	Purity	Organic	Location	FOB Price (EUR/kg)	Weekly Change	Update Date	Sentiment
China (Beijing)	Yellow, Organic	99.8%	Yes	Beijing	0.76	+0.01	2025-06-24	Firm/Bullish
China (Beijing)	Yellow	99.5%	No	Beijing	0.68	0.00	2025-06-24	Stable
USA (Washington D.C.)	No. 2	–	No	Washington D.C.	0.34	+0.02	2025-06-21	Strengthening
India (New Delhi)	Sortex Clean	–	No	New Delhi	0.72	+0.02	2025-06-21	Firm
Ukraine (Odesa)	–	–	No	Odesa	0.35	0.00	2025-06-21	Stable

🌍 Supply & Demand Drivers

• Acreage Reduction: India’s soybean area is likely to fall by 5% (down from 11.75m ha last year), as farmers seek crops with better returns.
• Production Estimates: SOPA pegs 2024 output at 12.5 million tonnes despite germination issues in some regions; yield average remains at 1,064 kg/ha.
• Market Prices vs. MSP: Market prices in key Indian states (USD 45.78–52.41/quintal) continue to lag the new MSP (USD 64.15).
• Crop Diversification: Farmers move to corn, pigeon pea, and cotton due to persistently low soybean returns.
• US and South American Influence: US acreage and expected robust South American supply remain consistent; global inventories stable, with moderate demand from China.

📊 Fundamentals

• India: Sowing currently at 4.30 million hectares as of June 30; significant progress in major states with ongoing re-sowing where germination lagged.
• China: FOB organic soybean prices edge higher; domestic stocks sufficient, with imports from US and Brazil steady.
• United States: Prices firming on the back of steady export demand and managed speculative positioning.
• Ukraine: Stable pricing and supply, with Black Sea export routes clear.

🌦️ Weather Outlook

• India: Monsoon rains remain timely and generally favorable for soybean growth, except for isolated areas in Maharashtra and Madhya Pradesh facing poor germination. Weather for the coming week is forecast to be seasonally normal, supporting further sowing and early growth stages.
• Midwest USA: Recent warm, dry spell stabilizing; forecast indicates scattered showers, beneficial for pod fill in July.
• Brazil/Argentina: Off-season, no immediate impact; but any shifts in spring rainfall outlook will be monitored as the Southern Hemisphere planting window nears.

🌏 Global Production & Stocks

Country	2024/25 Prod. (Mln t)	2024/25 Stocks (Mln t)	Status
Brazil	153.8	32.2	Ample supply, large export pace
United States	113.5	7.3	Adequate, tighter vs. 2023
Argentina	50.0	4.5	Rebounding after drought
India	12.5	1.4	Acreage/returns pressure
China (importer)	NA	29.0	Steady buying, high stock

📆 Trading Outlook & Recommendations

• Expect Indian domestic prices to remain below MSP in the short term, as acreage cuts are offset by favorable weather and existing stocks.
• Monitor US and Brazilian crop development—any weather shocks could rapidly tighten supplies and boost prices internationally.
• Indian processors: Secure contracts early, as local supply could fall more steeply if weather turns adverse.
• Exporters: Market opportunities may widen for destinations dependent on Indian soybeans if acreage trend continues.
• Short-term strategies: Favor buying on dips due to tight balance sheets and modest production growth expectations.

🔮 3-Day Regional Price Forecast

Region	Current Price (EUR/kg)	Forecast Range (Next 3-Day)	Sentiment
China (Beijing, Organic)	0.76	0.75–0.77	Slightly Bullish
India (New Delhi)	0.72	0.71–0.73	Firm
USA (Washington D.C.)	0.34	0.34–0.36	Stable to Bullish