Soybeans: Strong Start in 2026, But Supply Wave Signals Softer Second Half

Soybeans have started 2026 with gains of around 12%, but the balance of evidence now points toward a softer price environment into the second half as global supply outpaces demand growth. Any short‑term rallies driven by weather or geopolitics increasingly look like opportunities to lock in sales rather than the start of a new bull market. After a firm first quarter supported by improved US–China relations and higher energy prices, soybeans are moving into a more fundamentally heavy phase. The USDA projects a clear expansion in US acreage, while Brazil is heading for a second consecutive record crop. Together with only moderate demand growth, the market is set to run a comfortable surplus. For European buyers, especially of Indian soybean derivatives and meal, this translates into a more defensive price outlook and a shift toward a buyer’s market through Q2–Q3 2026.

Prices & Market Mood

At the Chicago Board of Trade on 9 April, May soybean futures eased to about EUR 10.7 per bushel (USD 11.62), reflecting the broader softening tone in grains after a strong start to the year. The pullback is modest, but it underlines that the earlier risk‑on sentiment is fading as supply signals grow louder.

Physical indications from the product side are broadly steady to slightly softer. Recent FOB offers converted to EUR point to US No. 2 soybeans near EUR 0.56/kg, Indian sortex‑clean around EUR 0.93/kg and Ukrainian origin near EUR 0.32/kg, with Chinese yellow soybeans roughly EUR 0.65–0.73/kg. These levels are consistent with a market that has lost upside momentum and is edging into a more competitive export environment.

Supply & Demand Balance

The key bearish driver is an impending supply wave. In the US, soybean planted area is projected to rise to 84.7 million acres in 2026, roughly 4% above last year as farmers switch out of corn, attracted by soybeans’ lower fertiliser requirements amid elevated nitrogen costs. This acreage shift significantly raises the bar for any sustained price rally.

Globally, 2026/27 soybean production is forecast above 442 million tonnes, with total availability close to 520 million tonnes. Brazil, already the dominant exporter, is heading for a second successive record harvest, adding ample exportable surplus to an already well‑supplied world market. Against this, consumption is expected to grow by about 2.7% to 423 million tonnes, solid but insufficient to absorb the supply expansion, leaving the market in a clear surplus.

Fundamentals & Trade Flows

The earlier boost from better US–China trade relations is starting to lose traction. Despite Beijing’s purchase commitments, US export volumes remain well below last year, and any further disappointment on Chinese buying could quickly weigh on futures. The market is increasingly sensitive to weekly shipment data and any signs of order deferrals.

High nitrogen fertiliser prices are reinforcing the preference for soybeans over corn in North America, entrenching the supply‑heavy outlook into 2026/27. With both US acreage and Brazilian output expanding, global buyers will likely have more options and stronger bargaining power, particularly if logistics and freight remain fluid.

🇮🇳 India & 🇪🇺 European Buyer Perspective

In India, the domestic soybean complex is closely mirroring international cues. On 9 April, soya refined oil in Indore and other central markets was quoted around EUR 151 per quintal, with Kandla‑delivered values close to EUR 150 per quintal (converted from USD). These levels indicate a market that is still firm compared with late 2025 but increasingly capped by global oversupply expectations.

For European buyers of Indian soybean products and meal, the medium‑term configuration clearly favours a buyer’s market. The combination of record Brazilian output, rising US acreage and only moderate demand growth suggests that any price spikes over the next two to four weeks, whether triggered by weather scares or renewed geopolitical tension, are more likely to be short‑lived and should be viewed as selling or hedging opportunities.

Short-Term Outlook & Weather

Over the coming weeks, the dominant risk to the bearish narrative is weather during early US planting and ongoing Brazilian harvest logistics. Brief concerns over planting delays or port congestion could prompt short‑covering rallies, but with global stocks comfortable, these are expected to fade once conditions normalise.

Weather in key producing regions will remain a headline driver, yet it will take a material and prolonged disruption in either the US or Brazil to significantly alter the surplus outlook for 2026/27. In the absence of such a shock, the path of least resistance for prices into Q2–Q3 remains sideways to lower.

Trading & Risk Management View

• End‑users in Europe should favour hand‑to‑mouth buying in the very short term, with a bias to extend coverage on price dips rather than chasing rallies.
• Producers and exporters may use weather‑ or geopolitics‑driven rallies over the next 2–4 weeks as opportunities to increase forward sales for Q3–Q4 2026.
• For crushers, the likely easing in bean prices against relatively resilient product demand offers potential to lock in crush margins on medium‑term horizons.

3-Day Directional View (EUR Basis)