Insight Focus
Soybean prices have rallied on Chinese buying hopes. Chicago soybean futures climbed to USD 12/bushel as confirmed Chinese purchases and expectations of renewed US-China agricultural trade boosted market sentiment. Weather concerns in the US Midwest added support despite larger US plantings, while record South American supplies and rising Chinese soybean inventories could limit further gains.
Chinese Trade Optimism Lifts Prices
Chicago soybean futures rose to USD 12/bushel in the first week of July after several weeks in the doldrums below USD 11.50. Analysts attributed the price rebound to signs of renewed Chinese buying of US soybeans and weather concerns in the US Midwest.
Source: CME
The price surge was preceded by endorsements in Chinese state media of renewed agricultural trade with the US, as rumours circulated of additional Chinese soybean purchases.
While no specific purchases were announced, a series of reports in state-controlled Chinese media suggested the country’s leadership is signalling a restart of agricultural trade with the US. On July 2, a Ministry of Commerce spokesman told a press conference that the US and China had established a framework for expanding two-way trade in agricultural products, including reciprocal tariff reductions.
In the days that followed, multiple commentaries by Chinese and foreign academics appeared in Chinese media, hailing the prospect of renewed US-China agricultural trade. A cancellation or waiver of the 10% tariffs levied by each country is believed to be under negotiation. Removal of these duties would help expand sales of US soybeans to private-sector buyers in China.
Rumours of Chinese buying were confirmed by a July 8 USDA report showing sales of 472,000 tonnes for delivery to China, including 136,000 tonnes for delivery during the 2025/26 marketing year and 336,000 tonnes during 2026/27. Another rumour suggested that China’s grain and soybean stockpiler had taken large positions in the US futures market, indicating its intent to make millions of tonnes of additional purchases for the fall months.
Weather Concerns Support Bullish Sentiment
Meanwhile, concerns about US crop conditions became a bullish factor. In the US Midwest, a weeks-long spell of extremely hot weather continued into early July, compounded by heavy rains and flooding in some areas. USDA’s Crop Progress report for the week ending July 5 indicated that 64% of soybean acreage was rated good to excellent, 2 percentage points lower than the previous year. USDA also reported that soybean blooming and pod-setting were ahead of their five-year averages.
The USDA’s June 30 Acreage report confirmed the expansion in soybean plantings estimated in the March report. The report estimated that 85.4 million US acres were planted with soybeans, up 5% from the previous year’s 81.2 million acres. The June estimate was 0.8% higher than the USDA’s March estimate of 84.7 million acres.
Source: USDA
USDA estimated that acreage had also increased for other oilseeds—sunflowers, canola, flaxseed, safflower, and mustard seed—while acreage for corn, wheat, sorghum and peanuts declined this year.
Expanded US soybean acreage in 2026/27 follows large crops in South America. USDA projects a 4.7-million tonne increase in US soybean production in 2026/27, and a 6 million tonne increase among foreign soybean exporters.
South America Maintains Export Dominance
Harvest is complete for Brazil’s record 180 million tonne 2025/26 soybean crop. Brazil’s exports are running at a record pace, with 14.5 million tonnes of soybeans exported in June. Cumulative exports during the first six months of 2026 reached 69.6 million tonnes, up 4.6 million tonnes year over year. The USDA projects that Brazil’s 2025/26 exports will reach 115 million tonnes, rising to 117.5 million tonnes in 2026/27.
Source: Comex
China was the destination for 69% of Brazil’s soybean exports during the first six months of 2026. Brazil’s exports to China are running at roughly the same pace as last year, while exports to other destinations have increased.
Argentina’s soybean harvest was more than 99% complete by July 5. The USDA’s June WASDE report increased its estimate of Argentina’s 2026 crop by 2 million tonnes to reflect the Buenos Aires Grain Exchange estimate of 50.1 million tonnes. The USDA projects Argentina’s soybean exports at 9 million tonnes in 2025/26 and 6.2 million tonnes in 2026/27.
Rising Inventories Could Cap Import Demand
Arrivals of Brazilian soybeans in China are now at their seasonal peak. Estimates from a Chinese market analysis published on July 3 showed that landed costs in China for Brazilian soybeans were still 4.4% lower than those for US soybeans, even before China’s 10% tariff on US goods was applied.
Chinese crushing plants are operating at high capacity, with an estimated 9.95 million tonnes of imported soybeans crushed in June. That was about 150,000 tonnes less than a year earlier. Another 10 million tonnes or more are expected to be processed in July, slightly below last year’s level. It is likely that many US soybeans arriving in China during June—purchased predominantly by state-owned companies—have been placed into government reserves.
The recent rise in CBOT prices has increased the cost of imported soybeans for Chinese buyers. With weak Chinese prices for soybean meal and oil, processing margins are under pressure, making it more difficult to sustain the current pace of Chinese imports.
Chinese soybean meal prices have fallen as increased arrivals of imported soybeans have boosted crushing activity and meal supplies. Soybean meal prices have remained below year-earlier levels for most of 2026. After peaking above CNY 3,200/tonne in March, cash soybean meal prices fell to a low of CNY 2,830/tonne in June. In contrast, soybean oil prices have remained above year-earlier levels, although they too declined during the summer months. Soybean oil peaked at CNY 9,040/tonne in April 2026 before falling to CNY 8,620/tonne in late June.
Source: China National Bureau of Statistics
Inventories of imported soybeans are already rising. Soybean stocks held by crushers totalled about 7.7 million tonnes on July 3, up 870,000 tonnes from a month earlier and 700,000 tonnes higher than a year earlier. Soybean meal inventories stood at about 680,000 tonnes, up 210,000 tonnes from the previous month.
