Soybean Futures Mixed, Market Focused on Trade and Planting Decisions

Soybean futures closed mixed, with gains fading late in most months due to a lack of fresh fundamental news. The market is closely monitoring South American harvest progress, U.S. weather ahead of planting, and trade developments, particularly tariffs and shipping fees with China. The U.S. Soybean Export Council (USSEC) continues to promote U.S. soy in global markets, particularly for human consumption and livestock feed.

The U.S. 2024/25 soybean supply and use projections remain unchanged, though soybean oil exports increased while biofuel use declined. The season-average soybean price dropped to $9.95 per bushel, while soybean meal and oil prices remained steady. Globally, production is nearly unchanged, but higher crush and lower ending stocks were reported, driven by increased processing in China, Argentina, and other countries.

Looking ahead, traders anticipate a shift in U.S. planting decisions, with soybean acreage expected to decline while corn acreage increases due to better per-acre returns and declining fertilizer costs. Yield trends indicate that North Dakota farmers may benefit from planting more corn, whereas Kansas growers may find soybeans more favorable. Over the past three decades, soybean-to-corn price ratios have trended lower in states like South Dakota, Iowa, Minnesota, and North Dakota, influencing planting decisions.

Despite a record soybean harvest in Brazil, its output was revised down to 165.9 million metric tons for 2024-25. However, Brazil, the world’s largest soybean producer and exporter, is projected to set new records in the 2025-26 marketing year, with output rising 2% to 173 million tonnes and exports increasing 3% to 112 million tonnes. China remains the largest consumer, and despite efforts to boost domestic production, its reliance on Brazilian soybeans is expected to continue due to stable trade relations.

Soybean exports from Brazil in March are forecast at 15.56 million metric tons (MMT), steady from previous estimates, while meal exports are expected at 2.3 MMT, slightly lower than prior projections. At the U.S. Gulf Coast, barge basis bids for soybeans saw a modest rebound, supported by firm freight rates amid navigation restrictions on the Mississippi River.

As Brazil gears up for another record soybean harvest in 2025-26, market discussions are intensifying ahead of USDA’s initial production projections in May. Historically, both USDA and CONAB have underestimated Brazil’s soybean output, making early forecasts subject to revision. While Brazil’s soybean acreage has expanded consistently for 18 years, economic challenges and production costs could slow future growth. Nevertheless, Brazil’s currency depreciation is insulating farmers from global price fluctuations, supporting continued expansion.

Meanwhile, ongoing U.S.-EU trade tensions could impact agricultural exports, with the EU considering tariffs on American soybeans. This could disrupt European livestock feed supply and increase meat production costs. The German Meat Industry Association has warned that rising soybean prices could significantly impact European meat prices.

The global soybean derivatives market is expected to grow significantly, from USD 212 billion in 2024 to USD 416.8 billion by 2033, at a 7.8% CAGR. This expansion is driven by rising demand for plant-based diets, livestock feed, and global food production. Soybean derivatives, including soy milk, soy flour, and soy oil, are gaining popularity among health-conscious consumers. Meanwhile, livestock farming is fueling demand for soybean meal, a key protein source in animal feed.

The soybean market showed mixed trends, with nearby contracts fractionally lower while some new crop months saw slight gains.

Market participants are closely monitoring the upcoming USDA March stocks and acreage report, as well as the introduction of reciprocal tariffs on April 2. Concerns persist over escalating trade disputes, particularly with key buyers such as Mexico and China. On Tuesday, commodity funds net sold soybean futures contracts but showed buying interest in soymeal and soyoil futures.

As a result, soybean futures are expected to remain volatile due to the influence of global production, trade policies, and shifting acreage decisions on market dynamics. While potential trade tensions and price fluctuations could affect short-term trends, long-term growth in soybean derivatives and livestock feed demand is anticipated to support global soybean markets. With a focus on South American harvest progress and U.S. planting decisions, soybean prices may face short-term pressure, though long-term growth prospects remain strong.

Data for Technical Analysis (1H) CFD US Soybeans Futures - May 25 (ZSK5)

Resistance : 1003.61, 1003.97, 1004.54

Support : 1002.47, 1002.11, 1001.54        

1H Outlook

Source: TradingView         

Buy/Long 1 If the support at the price range 1001.47 - 1002.47 is touched, but the support at 1002.47 cannot be broken, the TP may be set around 1003.95 and the SL around 1000.97, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 1003.61 – 1004.61, TP may be set around 1006.00 and SL around 1001.97, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 1003.61 – 1004.61 is touched, but the resistance 1003.61 cannot be broken, the TP may be set around 1002.45 and the SL around 1003.11, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 1001.47 - 1002.47, TP may be set around 1000.20 and SL around 1000.20, or up to the risk appetite.       

Pivot Points Mar 27, 2025 03:23AM GMT