Contributor: Currency Hedger | Market Analysis: Louis Roche, Today Markets

Soybean futures are under pressure, trading below $12.80 per bushel and reaching a six-week low as expectations for a larger US harvest and improving crop conditions in South America weigh on the market. Higher US production and yield forecasts from the US Department of Agriculture (USDA), combined with an accelerating harvest, are strengthening near-term supply expectations.

Attention is now turning to the pace of US harvesting, Brazil’s planting progress and whether renewed trade discussions between the United States and China can translate into stronger demand for American soybeans. Unless export demand improves meaningfully, abundant supply could continue to limit the potential for a sustained recovery over the coming sessions.

Soybean Market Snapshot

Fundamental Drivers: Rising Supply Expectations Pressure Soybeans

USDA raises US production and yield forecasts

The USDA has raised its 2026 US soybean production forecast to 4.562 billion bushels, up from 4.535 billion in September and above market expectations of 4.534 billion. The agency also increased its average yield estimate to 53.1 bushels per acre from 52.8.

The upward revisions reinforce expectations of a substantial US crop, increasing the risk that available supplies will exceed near-term demand. With futures already falling to a six-week low, traders may remain reluctant to establish aggressive bullish positions until clearer evidence emerges that export demand can absorb the additional production.

The next important indicator is the weekly USDA crop progress report. Its assessment of harvest completion and field conditions should help determine whether the pace of supply entering the market continues to accelerate.

Dry Midwest weather supports harvesting

Mostly dry weather across the US Midwest is allowing farmers to make faster harvesting progress. This is reducing the risk of weather-related delays and bringing more of the expected crop into the supply chain.

A rapid harvest can add short-term selling pressure as producers deliver soybeans to market. If harvesting continues smoothly and crop estimates remain elevated, prices may struggle to establish a durable floor.

However, harvesting progress alone does not determine the longer-term direction. Export sales, domestic processing demand and the amount of crop ultimately available for storage will also influence the balance between supply and consumption.

Brazil’s planting progress adds to the global supply outlook

Brazil’s soybean planting campaign is advancing at a record pace, supported by favorable rainfall. This provides an additional source of supply pressure, particularly if planting conditions remain constructive and the crop develops without significant weather disruptions.

Brazil is a major competitor to US exporters. A healthy South American crop could increase competition for international buyers in the months ahead, limiting the ability of US farmers to command higher prices.

Weather remains an important variable, however. Changes in rainfall patterns during planting and subsequent crop development could quickly alter production expectations and introduce renewed volatility into the market.

China Demand: The Key Counterweight to Rising Supply

Trade discussions have yet to guarantee stronger purchases

Traders are watching for evidence that recent discussions between US President Donald Trump and Chinese President Xi Jinping will lead to additional Chinese purchases of American agricultural products.

Any meaningful reduction in trade friction could improve sentiment and provide support for soybean futures. Nevertheless, punitive Chinese tariffs continue to discourage private buyers from purchasing US supplies, leaving uncertainty over the scale and timing of any demand recovery.

Market participants will therefore need to distinguish between positive diplomatic developments and confirmed commercial purchases. Without evidence of stronger export commitments, expectations surrounding trade negotiations may provide only temporary support.

China’s production and import forecasts differ from the USDA outlook

China has lowered its 2026/27 domestic soybean production forecast to 20.36 million tonnes, while maintaining its import outlook at 95.5 million tonnes. That import estimate is considerably below the USDA’s projection of 115 million tonnes.

The difference highlights uncertainty over the scale of China’s future import demand. Lower domestic production could increase the need for imported soybeans, but the effect will depend on consumption, stock levels, purchasing policies and the share of demand directed toward US rather than South American supplies.

For the market, stronger Chinese buying would provide an important counterweight to expanding US production. Until that demand becomes more visible, the supply outlook is likely to remain the dominant near-term influence.

Technical Outlook: Soybeans Test Support Below $12.80

Soybean futures have fallen below $12.80 per bushel and reached their lowest level in six weeks. This signals deteriorating short-term momentum, although the available market information does not establish a verified technical support level below the current price.

The $12.80 area is an immediate reference point for the coming sessions. A recovery above it could indicate that buyers are beginning to defend the market, while continued trading below this area would leave prices vulnerable to further weakness.

Traders should monitor the latest price chart and confirmed swing lows before assigning precise support and resistance levels.

Bearish scenario

If US harvesting continues at a strong pace, production estimates remain elevated and Chinese demand fails to improve, soybean futures could remain under pressure. A sustained move below the recent six-week low would increase the risk of another leg lower, particularly if export data reinforce concerns about competition from Brazil.

Bullish scenario

Prices could recover if trade discussions produce confirmed Chinese purchases, export demand strengthens or adverse weather begins to threaten South American crop prospects. A return above $12.80 would be an initial sign of stabilisation, although a sustained recovery would require evidence that demand is improving relative to supply.

Neutral scenario

Soybeans could consolidate around current levels while the market waits for the USDA crop progress report, fresh export information and further developments in US-China trade relations. This outcome would suggest that bearish supply expectations are being balanced by uncertainty over future demand.

Soybean Price Forecast: Outlook for the Coming Sessions

The near-term outlook remains cautious to bearish, with the balance of risk tilted toward further weakness while futures remain below $12.80 per bushel.

The principal pressure comes from the USDA’s higher production and yield forecasts, together with favorable harvesting conditions across the US Midwest. Brazil’s rapid planting progress adds to expectations of ample global availability, increasing competition among exporters.

The next phase of price discovery will depend on whether demand can absorb the larger expected crop. The USDA’s weekly crop progress report, US export activity and any confirmed Chinese purchases will be particularly important in determining whether the recent decline extends or gives way to a recovery.

A sustained improvement in trade relations could help prices stabilise, but optimism alone may not be sufficient. Without tangible evidence of stronger buying, rallies could attract renewed selling interest.

Conversely, weather disruptions in South America or a meaningful improvement in US export demand could change the balance and support a recovery. For now, the market appears more vulnerable to supply-driven weakness than positioned for a sustained bullish reversal.

Analysis — Louis Roche, Today Markets

Soybeans are facing a familiar agricultural-market challenge: rising production expectations are arriving at a time when the demand outlook remains uncertain. The USDA’s upward revisions have strengthened the supply case, while favorable harvesting conditions and rapid Brazilian planting are reducing immediate concerns about availability.

The most important variable is whether China becomes a more active buyer of US soybeans. Diplomatic progress may improve sentiment, but the market ultimately needs confirmed purchases and stronger export flows to offset the additional supply.

For the coming sessions, I would watch the relationship between harvest progress and export demand rather than assume that the six-week low automatically represents a buying opportunity. A recovery above $12.80 could signal stabilisation, but a more convincing bullish case would require clear evidence of improving demand or a threat to production.

Until those signals emerge, a cautious approach remains appropriate, with weather developments and trade policy capable of changing the outlook quickly.

Currency Hedger View

Soybean price movements can affect agricultural traders, food manufacturers, importers and businesses exposed to international commodity costs. A stronger US dollar can also influence the purchasing power of overseas buyers, while currency fluctuations may alter the local-currency cost of imported soybeans.

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Disclaimer

This article is for informational and educational purposes only and does not constitute investment advice, financial advice or a recommendation to buy or sell any financial instrument or commodity. Commodity prices can be volatile, and forecasts may not materialise. Market participants should conduct their own research and assess their risk tolerance before making trading or investment decisions.