Today Markets Analysis: Soybean futures held around $13 per bushel, close to their highest level since December 2023, as strong Chinese demand and a sharp rise in oil prices provided support despite the USDA raising its forecast for US soybean production to a record level.
The market is therefore facing a familiar commodity tension: ample supply on one side and stronger-than-expected demand and energy-market support on the other.
Record US Crop Keeps Supply in Focus
The USDA’s September WASDE report increased its forecast for 2026/27 US soybean production to 4.535 billion bushels, up from 4.519 billion in August.
US soybean yields were projected at 52.8 bushels per acre, reinforcing expectations for another substantial American harvest.
The USDA also raised the outlook for US ending stocks to 310 million bushels, although that figure was below the 320 million forecast for August. Stocks nevertheless came in above market expectations.
The combination suggests that the underlying US supply picture remains relatively comfortable.
For soybean bulls, therefore, the challenge is clear: demand needs to remain strong enough to absorb the additional production without allowing inventories to build significantly.
China Returns to the US Soybean Market
Demand from China is providing an important counterweight.
China reportedly purchased approximately 1 million metric tons of US soybeans last week, as the world’s largest soybean importer increases purchases ahead of an expected visit by President Xi Jinping to Washington later this month.
The timing is significant.
Chinese buying has the potential to provide an important source of demand for US exporters at a time when the USDA is forecasting record American production.
For the soybean market, the question is not simply how large the US crop will be. It is whether export demand can keep pace with that supply.
If Chinese purchases continue at elevated levels, the market could absorb more of the anticipated production than current inventory projections imply.
Higher Oil Prices Add Another Layer of Support
Soybeans are also receiving support from the energy complex.
Oil prices jumped following new Houthi strikes on Saudi Arabia and Iranian attacks on shipping in the Gulf, adding to supply concerns after the closure of a key Saudi oil pipeline.
Higher crude prices can influence soybean demand because vegetable oils, including soybean oil, are widely used in biofuel production.
This creates an additional transmission channel between the energy and agricultural markets.
If crude oil remains elevated, biofuel economics could provide additional support for soybean oil demand, indirectly strengthening the broader soybean complex.
The Market Is Balancing Three Forces
Soybeans are currently being pulled in three different directions:
| Factor | Market Impact |
|---|---|
| Record US production forecast | Bearish |
| Strong Chinese soybean purchases | Bullish |
| Higher oil prices and biofuel demand | Bullish |
| Higher-than-expected US ending stocks | Bearish |
| Potential improvement in US exports | Bullish |
The result is a market that remains supported near $13, but without a clear fundamental justification for an unchecked rally.
The key distinction is between production potential and realised demand.
A record harvest does not automatically mean lower prices if exporters can find buyers for the additional supply.
What Traders Are Watching Next
The most important signals for soybean traders are likely to be:
Chinese purchasing activity: Continued large US soybean purchases would strengthen the demand argument and could provide further support.
US export commitments: Strong export sales would help determine whether the additional US crop can be absorbed without a significant increase in inventories.
Crude oil prices: Further disruption to Middle Eastern energy supplies could strengthen soybean oil and biofuel economics.
US harvest conditions: As the harvest progresses, actual yields will become increasingly important compared with USDA estimates.
Ending stocks: The market will be watching whether inventory projections begin moving higher or whether stronger demand limits the expected increase.
Today Markets View
Soybeans are approaching an important fundamental test.
The USDA is pointing towards record US production, which should normally create downward pressure on prices. However, stronger Chinese buying and rising energy prices are currently preventing the supply story from dominating the market.
The next move may therefore depend less on the size of the US crop itself and more on whether global demand can absorb it.
“Soybeans are being supported by a powerful combination of Chinese demand and higher energy prices, but the record US crop means the market still has a substantial supply cushion. The critical question is whether export demand can expand quickly enough to prevent that additional production from translating into higher inventories. For now, the demand story is keeping the bears under pressure.”
Louis Roche, Analyst at Today Markets
Bottom Line
Soybeans remain near $13 per bushel, supported by strong Chinese purchases and higher oil prices despite expectations for record US production.
The market has not yet broken free from its supply constraints, but continued Chinese buying could provide the catalyst for a sustained move higher.
For traders, the key question is becoming increasingly straightforward: will stronger global demand absorb America’s record soybean crop?
Analysis by Louis Roche, Analyst, Today Markets
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