Soybeans under pressure: strong Ukrainian crush meets heavy South American supply
Soybean prices face pressure from record South American supply and cheap exports, while Ukrainian crush demand stays firm but vulnerable to rapeseed and oil price risks.
Prices & Spreads
Over the past three months, Ukrainian domestic soybean purchase prices have risen, with GM soybeans now around USD 430–440/t ex‑VAT, delivered to processing plants. Non‑GM soybeans at factories also trade at firm levels, reflecting strong crush demand. By contrast, export prices are weaker: EU bids for non‑GM at western border points have fallen by about USD 5/t to roughly USD 475–480/t, while GM export values eased to around USD 465–470/t.
Converted at an indicative rate of 1 EUR = 1.08 USD, this implies roughly EUR 398–407/t for domestic GM soybeans and around EUR 440–445/t for non‑GM export bids. Current spot indications from international offers corroborate this divergence: GMO‑free Ukrainian soybeans CPT Odesa are trading near EUR 372/t, while US No.2 FOB Gulf equivalents are around EUR 627/t, highlighting regional and quality‑related price spreads rather than outright strength in the global market.
Supply & Demand Balance
Since the start of the 2025/26 season, Ukraine has exported about 1.85 Mt of soybeans, while domestic stocks as of 1 June are estimated at 1.12 Mt. These inventories are sufficient to cover processor demand until the rapeseed harvest begins, after which crushers will gradually shift capacity toward rapeseed. This suggests domestic soybean prices are likely to stabilise or soften modestly as rapeseed flows increase and competition for crushing capacity rises.
On the export side, demand for Ukrainian GM soybeans at ports is described as almost absent, and even for non‑GM beans EU buyers have reduced bids. The main headwind is abundant and relatively cheap soybeans and soybean meal from South America, which dominate the European protein mix. Brazil’s June soybean export forecast has been raised to around 15.3–15.8 Mt, underlining the strength of its presence in the world market and further displacing alternative origins in key destinations such as the EU and China.
Global Fundamentals & Weather
Globally, the soybean complex remains bearish. Chicago July soybean futures are trading near USD 415/t, roughly 7% lower than a month ago, as markets digest higher South American production and robust Brazilian export flows. Recent data confirm that CBOT soybean prices have fallen for a third straight week, with cumulative Brazilian shipments in early June pointing toward monthly exports close to 15.8 Mt if the current pace is maintained.
Weather conditions in the US remain broadly favourable for soybeans, reducing immediate yield risk premia in futures. At the same time, Brazil’s 2025/26 and 2026/27 production outlooks continue to edge higher, although analysts note that input costs, credit conditions and potential El Niño‑related weather in the next cycle pose medium‑term uncertainties rather than imminent supply threats.
Lower energy prices amplify the downward pressure. Brent and WTI crude are hovering in the high‑USD 70s and mid‑USD 70s per barrel, respectively, well below past peaks. This dampens support for vegetable oil and biofuel demand, reducing the upside potential for soybean oil and, by extension, whole‑bean values in the months ahead.
Risks & Drivers to Watch
- Rapeseed competition in Ukraine: As rapeseed arrivals accelerate into crushers, soybean utilisation may ease, capping further domestic price gains and potentially encouraging additional exports if logistics allow.
- South American export pace: Any slowdown in Brazilian shipments, whether due to logistics or policy shifts, could modestly improve demand for Black Sea and US origin in late summer, but current schedules show no clear sign of that yet.
- Biofuel and oil markets: A further decline in crude oil would weigh on biodiesel margins and soybean oil demand; conversely, a sharp oil rebound is one of the few plausible upside catalysts for the complex in the near term.
- Weather surprises: Adverse weather in key US or South American producing regions later in the season remains the primary bullish risk but is not currently priced as a major concern.
Trading Outlook & 3‑Day View
- Ukrainian farmers: With domestic crushers still buying at relatively attractive levels versus exports, near‑term sales into the domestic market remain more compelling than port sales, especially for GM beans. Consider incremental selling before rapeseed crush ramps up and erodes plant appetite.
- Crushers: Current stock levels and bearish global futures favour a cautious, hand‑to‑mouth procurement strategy with opportunistic coverage on sharp dips, rather than aggressive forward buying.
- EU importers: In the short run, South American origin is likely to stay the cheapest option, but Ukrainian non‑GM beans may offer value for niche and identity‑preserved segments if basis levels weaken further under export pressure.
- Speculators: With futures under pressure from record South American supply and benign US weather, the risk/reward still favours a mildly bearish or options‑based approach, while guarding against weather or energy‑driven short squeezes.
Over the next three trading days, Ukrainian domestic soybean prices are expected to hold mostly steady to slightly softer in EUR terms, as processors remain active but global benchmarks drift. Ukrainian FOB values are likely to stay under downward pressure relative to Brazilian offers. On CBOT, absent a weather or energy shock, the bias remains sideways‑to‑lower, with rallies seen as selling opportunities rather than the start of a sustained uptrend.