Soybeans: China Returns, But Big South American Supply Caps the Rally

China’s strong re-entry into US soybeans has improved demand visibility for 2026/27, but futures remain capped by very comfortable global supply led by Brazil and a solid US crop outlook. Prices have already priced in much of the demand story and are now hostage to upcoming yield and weather data. The soybean complex is entering the new US marketing year with two powerful but opposing forces. On one side, China has booked 4.56 million tonnes of US new-crop soybeans within eight weeks after a full year of absence, underpinned by a multi‑year purchase agreement. On the other side, USDA projects large US and record‑high Brazilian crops that more than cover China’s growing import needs. Futures rallied ahead of the Chinese buying wave and then eased again, as traders refocused on the size of US and South American harvests and the weekly pace of export sales. Physical prices in key origins show only modest moves, mirroring a market that is firming but not in shortage.

Prices

The CBOT soybean curve on 17 August 2026 is modestly firmer on the day, with nearby contracts up around 0.25–0.30%. The November 2026 contract trades near 1,195.75 USc/bu, while January 2027 is around 1,210.75 USc/bu, reflecting a slightly upward-sloping forward structure but no pronounced premium for deferred supply.

Using a rough conversion (1 bu ≈ 27.22 kg) and an indicative EUR/USD rate, this places CBOT November soybeans in the area of mid‑€430s per tonne, consistent with a market that has recovered from June lows but remains well below previous weather‑driven spikes. Soybean oil and meal are also slightly higher on the day, with front‑month oil around 69.5 USc/lb and meal near 311–318 USD/short ton, pointing to a broadly steady crush margin environment.

In physical markets, recent offers converted to EUR show Indian FOB New Delhi soybeans (sortex clean) around €0.87/kg, Chinese organic Yellow beans near €0.86/kg and conventional Chinese beans at about €0.76/kg. Ukrainian FOB Odesa soybeans are significantly cheaper, roughly €0.38/kg, while US No. 2 FOB offers sit around €0.63/kg. The small day‑to‑day changes and mixed moves by origin underline a market balancing stronger new‑crop demand with ample forward supplies.

Supply & Demand

The key structural change this summer is China’s return to the US soybean market. Within eight weeks, Chinese buyers booked 4.56 million tonnes of US soybeans for 2026/27 after a year without a single new‑crop purchase. These volumes came in waves, with a peak week of 1.45 million tonnes in early August and several million‑tonne weeks in June and July, sharply contrasting with the previous year, when China had zero forward US coverage at this point.

Even so, the booked volumes are best seen as a down payment rather than a surge. They currently cover only about 18% of China’s annual commitment of at least 25 million tonnes of US soybeans under the new trade agreement and represent roughly 10% of the total US export forecast of 45.18 million tonnes for 2026/27. This reactivates the US as a meaningful supplier to China but does not, on its own, tighten the global balance.

On the supply side, the outlook remains comfortably ample. USDA pegs the 2026/27 US soybean crop at 122.99 million tonnes. More importantly, Brazil is projected at a massive 186.00 million tonnes, with exports around 118.00 million tonnes – more than two and a half times projected US shipments. With China’s import demand estimated at 115.00 million tonnes, the combination of Brazil’s dominance and a solid US crop ensures coverage of needs unless weather or logistics significantly disrupt either origin.

Fundamentals & Market Behaviour

Price action over the past two months reveals how much of the demand story was priced in ahead of the visible Chinese buying. The CBOT November contract rallied from around 1,134.00 USc/bu on 11 June to 1,243.75 USc/bu on 23 July – nearly 110 cents or about 9.7% – before most of the largest Chinese purchases were reported. Once the sales became public and attention shifted back to comfortable supply forecasts, the market retraced roughly 66 cents, bringing prices back toward the 1,190 USc/bu area.

This pattern underscores that the market is currently more sensitive to adjustments in crop expectations than to incremental demand news. The combination of a large projected US harvest and record‑sized Brazilian crop leaves little room for a sustained rally unless yields underperform or weather risks intensify. At the same time, soybean oil and meal futures have edged modestly higher, hinting that crush margins remain attractive enough to support processing, which in turn helps absorb part of the bumper bean supply.

The new trade agreement – committing China to buy at least 25 million tonnes of US soybeans annually until 2028 – also needs to be kept in perspective. In the current 2025/26 season ending 31 August, Chinese commitments of 12.50 million tonnes are only half of that target and substantially below the 22.55 million and 24.42 million tonnes recorded in the two preceding seasons. Even if the 25‑million‑tonne level were achieved, it would still sit about 14% under the five‑year average of 29 million tonnes between 2020 and 2024, emphasizing that the agreement stabilizes but does not fully restore previous demand levels.

Weather & Short-Term Drivers

In the coming weeks, the market will juggle two parallel drivers. On the supply side, late‑season US weather and yield reports will determine whether the crop ultimately matches the 122.99‑million‑tonne projection. At the same time, Brazil is preparing to plant a crop already pencilled in at 186.00 million tonnes, and any planting delays, moisture deficits or excessive rains could quickly alter that outlook.

On the demand side, the weekly USDA export sales reports regain central importance. With only 4.56 million tonnes of the annual 25‑million‑tonne commitment already booked for the new US marketing year, traders will closely track whether Chinese buying continues in steady fashion or remains lumpy, alternating between large single‑week purchases and quieter periods. The interaction of these weekly booking patterns with evolving yield expectations will drive volatility through the US harvest window.

Trading Outlook

• Producers: Consider scaling in additional hedges on rallies toward recent highs, as current prices already reflect strong Chinese demand while large US and Brazilian crops limit upside. Retain some unpriced volume in case of late‑season weather issues.
• Importers & feed buyers: Use current price softness after the July peak to secure part of Q4 2026–Q1 2027 needs, especially from competitive origins such as Ukraine, while preserving flexibility for further dips if US yields surprise on the upside.
• Traders & crushers: Focus on crush margin opportunities, as soybean oil and meal are moving broadly in line with beans. Monitor the pace of Chinese US bookings versus Brazilian competitiveness; basis risk between US and South American origins will stay elevated.

3‑Day Directional Outlook (EUR-based)

• CBOT Soybeans: Slightly firm to sideways in EUR terms, with modest support from ongoing Chinese interest but capped by benign supply expectations.
• CBOT Soybean Meal: Sideways to mildly higher, tracking feed demand and crush dynamics.
• CBOT Soybean Oil: Sideways, with direction influenced by energy markets and vegetable oil spreads rather than beans alone.