Soybeans Under Pressure as USDA Lifts Old-Crop Supply and Oilseed Stocks
USDA’s June report lifts old-crop soy output and global oilseed stocks, weighing on soybean prices despite firm crushing demand. Key price, supply and trade signals.
Prices & Spreads
USDA’s June report triggered a renewed leg lower in benchmark futures. July soybean futures in Chicago declined by 0.7% to about USD 409.7/t after the release, roughly 10% below prices seen after the May report, with November contracts only about USD 7/t above July, signalling a relatively flat forward curve and limited reward for storing beans.
Physical quotations mirror this soft tone. Converted to EUR (using ~1 USD = 0.93 EUR; ~1 local unit = 0.0010–0.0011 EUR for ARS), FOB soybean offers currently indicate:
Supply & Demand: Comfortable Balance, Argentine Rebound
The key bearish driver is the steady expansion of the global oilseed complex. For 2025/26, USDA’s Foreign Agricultural Service raised global oilseed production by 2.15 Mt to 700.65 Mt, largely on a 2 Mt upward revision to Argentina’s soybean crop to 50 Mt. The Rosario exchange now pegs the crop even higher at 51.5 Mt, suggesting more carryover into 2026/27 and reinforcing downside pressure on international benchmarks.
Looking ahead, USDA nudged the 2026/27 global oilseed production outlook up to a record 718.2 Mt, from 700.65 Mt in 2025/26 and 686.65 Mt in 2024/25. The increase is driven mainly by sunflowerseed, not soybeans: global sunflower output was lifted by 0.3 Mt to 62.06 Mt, while the 2026/27 soybean crop was trimmed by 0.2 Mt to 441.34 Mt. Despite the minor cut in soybeans, the overall oilseed balance remains clearly comfortable due to strong sunflower and rapeseed availability and higher old‑crop soy stocks.
Processing demand continues to grow steadily. Global oilseed crushing for 2026/27 is forecast at 606.74 Mt, up from 587.5 Mt in 2025/26 and 568.9 Mt in 2024/25. Yet this demand growth is more than matched by supply, with global oilseed ending stocks in 2026/27 projected at 146.99 Mt, slightly above 146.57 Mt in 2025/26 and well above 136.1 Mt in 2023/24. For soybeans, this translates into comfortable pipeline coverage and reduced risk premiums, limiting the scope for weather‑driven rallies unless major production shocks materialise.
Cross-Commodity Signals: Sunflower, Rapeseed & Energy
Developments in competing oilseeds reinforce the bearish undertone for soybeans. Global sunflower production for 2026/27 is forecast at 62.06 Mt, up sharply from 55.25 Mt in 2025/26 and 53.0 Mt in 2024/25, with Russia’s crop estimate raised to 19.5 Mt and Ukraine holding at 13.5 Mt. Ample sunflower availability tends to cap vegetable oil prices and narrows the upside for soyoil, one of the key value drivers in the soybean crush.
In Ukraine, sunflower seed prices have firmed to about USD 341–346/t delivered plant (≈ 317–322 EUR/t), mainly due to currency depreciation, while sunflower oil export prices are stable around USD 1,320–1,330/t (≈ 1,228–1,238 EUR/t) delivered port. These relatively stable sunflower oil values, combined with growing rapeseed production (96.9 Mt forecast for 2026/27 vs 95.57 Mt in 2025/26), point to a broadly well‑supplied vegetable oil complex that limits the need for aggressive soyoil bidding.
Energy markets add an extra headwind. Brent crude has fallen sharply by about 17.5% over the month to around USD 88.5/bbl (≈ 82 EUR/bbl). With prices struggling below the psychological USD 90/bbl mark, discretionary biodiesel demand and investor appetite for the broader commodity complex may remain subdued, further dampening enthusiasm for soybeans and other oilseeds.
Weather & Regional Context
Weather remains a critical short‑term risk factor, but current signals do not offset the fundamentally comfortable balance. Recent forecasts point to typical seasonal conditions in key South American soy areas such as Rosario, Argentina, with intermittent clouds, showers and near‑normal temperatures, conditions that broadly support fieldwork and soil moisture for the next cycle.
In the United States, medium‑range outlooks from US agencies highlight mixed patterns with localised storms but no widespread, prolonged drought in the core soybean belt at this stage. This means weather‑driven risk premiums in futures remain modest compared with years of pronounced dryness or flooding, leaving macro factors and the heavy global balance as the dominant price drivers in the very near term.
Trading Outlook & 3‑Day Direction
Strategy Pointers (short-term)
- Producers / Sellers: With global balances comfortable and July futures already 10% below post‑May levels, consider incremental hedging on rallies rather than chasing current lows. Use modest price upticks or weather scares to extend coverage into Q4 2026.
- Importers / Crushers: The combination of higher Argentine supplies, strong sunflower and rapeseed availability and weaker crude argues for a buy‑on‑dips approach. Stagger purchases to benefit from potential further softness, but avoid being fully uncovered in case of sudden US weather issues.
- Speculative participants: The flat forward curve and comfortable stocks favour a cautiously bearish to range‑trading stance, with upside risk mainly from weather shocks or a sharp rebound in energy prices.
3‑Day Regional Price Indication (Direction in EUR)
- CME-linked benchmarks (EU-equivalent in EUR/t): Slight downside bias as markets continue to absorb larger Argentine crop and higher global stocks.
- Black Sea (Ukraine, FOB Odesa): Mildly soft to sideways; export competition from South America and ample oilseed supply cap any rebounds.
- US Gulf / Atlantic outlets: Mostly sideways, with basis levels partly shielding local prices but futures setting a cautious tone.