Soybeans Under Pressure as China Pulls Back and US Supply Builds
Concise soybeans market analysis: weak Chinese demand, rising US output, diversified export flows, weather outlook and short-term EUR price implications.
Prices
CBOT soybean futures have come under renewed pressure in late July, with front contracts retreating from mid‑month highs as macro headwinds and solid crop conditions weighed on risk appetite. At the same time, physical offers show relatively low and steady export values when converted into euros, reflecting ample global availability rather than acute tightness.
Using an indicative rate of 1 USD = 0.92 EUR, current reference offers imply approximate levels of:
Supply & Demand Shifts
Forward US export commitments for the 2025/26 marketing year have reached 41.4 million tonnes as of July 16, down 18.5% year on year. The centre of weakness is China, whose US purchases have slumped 45% to 12.4 million tonnes. Other destinations have increased buying by a combined 3.3 million tonnes but cannot fully offset the shortfall from China.
Japan, Indonesia, Bangladesh, Egypt and Pakistan are emerging as key growth outlets thanks to new US trade agreements and deliberate diversification efforts. Japan’s US commitments are up 10.2% to 2.3 million tonnes, Indonesia 19.8% to 2.4 million tonnes, Bangladesh 49% to 1.2 million tonnes, Egypt 41.6% to 4.9 million tonnes, and Pakistan has more than tripled its bookings to 1.1 million tonnes after easing GMO import rules.
Despite this broader footprint, China remains the pivotal swing buyer. US shipments to China were largely suspended for almost five months amid renewed trade tensions, during which Chinese crushers turned to aggressively priced Brazilian beans. Purchases resumed in late October 2025 but remain limited, and the 10% tariff on US soybeans continues to erode competitiveness against Brazil.
Fundamentals & Trade Policy
Looking ahead, China has so far committed to only 2.4 million tonnes of US soybeans for 2026/27 – extremely modest given its usual scale. In parallel, USDA projects US soybean production at around 120.7 million tonnes and exports at 45.18 million tonnes, a 9.2% increase. This combination of larger US supply and cautious Chinese offtake underlines the importance of maintaining and expanding alternative markets.
Weekly export sales data confirm a slow start: cumulative soybean sales for 2025/26 cover only a mid-single-digit share of USDA’s export forecast, far below the five-year average for this point in the year, highlighting front-loaded demand risk. At the global level, South America is also on track for strong harvests, with Brazilian exports expected to remain dominant in world trade. Together, these fundamentals argue for a generally well-supplied market into 2026/27, with price strength likely to be weather- or policy-driven rather than structurally tight.
Weather & Crop Conditions
US crop conditions for soybeans remain broadly favourable entering the key pod-setting period. Recent assessments show more than 60% of the US soybean crop in good-to-excellent condition, supported by adequate moisture across much of the Midwest, although some Plains and Delta areas face pockets of dryness. Medium-range outlooks suggest near- to slightly-below-normal temperatures in the central Midwest with uncertain rainfall distribution, which currently argues against a major US yield threat.
In Brazil, recent seasons have demonstrated that weather volatility can be high, but for now there is no fresh indication of a major disruption to the next crop cycle. Together with the expansion of planted area, this reinforces expectations of strong South American competition for export demand into 2027. Weather therefore remains a risk factor to watch rather than a present bullish driver.
Market Outlook & Trading Implications
- Flat-to-soft near term: With US export commitments lagging and global supply comfortable, soybean prices are likely to trade sideways to slightly lower in the short term, barring a sharp weather scare or geopolitical shock.
- Basis risk for US origin: Weak Chinese engagement and a 10% tariff suggest continued pressure on US FOB basis versus Brazil. End-users in Asia and MENA may find attractive US offers, especially if freight or currency moves improve landed parity.
- Upside triggers limited: A meaningful rally would likely require either a US weather downgrade, logistical disruptions in Brazil, or a policy shift reducing China’s tariff burden on US beans.
Strategy Pointers
- Importers / crushers: Consider layering in US-origin coverage for 2025/26 where spreads versus Brazil are favourable, especially into non-Chinese Asian destinations benefiting from new trade deals.
- Producers (US/EU): Use any weather- or macro-driven rallies to advance incremental 2026/27 sales, given projected larger US output and the structural shift of Chinese demand to Brazil.
- Traders: Focus on relative value: Brazil vs US export spreads, GMO vs GMO-free premiums, and organic differentials, rather than directional bets, until a clearer signal emerges from China or weather.
3-Day Directional View (EUR-based)
- CBOT-linked export values (US Gulf, EUR terms): Slight downside bias as futures consolidate recent losses and export demand stays cautious.
- Black Sea / Ukraine GMO-free (CPT, EUR): Stable to mildly softer, with regional competition and steady logistics keeping a lid on premiums.
- Asian FOB (China, India, EUR): Mostly steady; modest support from freight and currency swings but no strong fundamental driver for a breakout.