Insight Focus
Soybean prices surged to a three-year high as demand strengthened. Strong Chinese buying, solid US demand and weather concerns pushed futures above USD 13/bushel, while prices in Brazil also climbed sharply. The rally spread into China despite weak demand indicators, with markets now watching US-China trade talks and El Niño risks.
US Soybean Rally Pushes Prices to Three-Year Highs
An August soybean futures rally to close out the 2025/26 market year sent prices to USD 13/bushel in September 2026 for the first time in nearly three years. This was about USD 3/bushel above the level at which soybeans began the 2025/26 market year. The reverberations were felt in Brazil and China.
Source: CBOT
The August rally was a suitable close to the 2025/26 market year, during which US soybeans rode a roller coaster driven largely by China. The year began with depressed prices as the Middle Kingdom failed to show up as a buyer after the 2025 harvest. Prices rallied later in October as China pledged to buy 12 million tonnes of soybeans.
The ups and downs during the rest of the year were spurred and deflated by speculation about new Chinese purchase commitments, dashed hopes for those commitments, news about closures and reopenings of the Strait of Hormuz, Northern Hemisphere growing conditions, and reverberations from Black Sea wheat and corn trade.
The August 2026 rally lifted soybean futures by USD 1.52 in less than a month, an increase of 12.9%. Last fall’s rally also boosted prices by USD 1.47 in about a month. There were also declines between those rallies, but prices ratcheted upward so that the September high of USD 13.13 per bushel exceeded the November peak of USD 11.54.
The August rally appears to have been driven by a combination of factors. Crop conditions in the US deteriorated marginally due to an extremely hot summer and heavy rains in the main US growing regions. The September 8 USDA Crop Progress report showed that 58% of the soybean crop was rated “good” or “excellent”, about the same as the previous week but down 8 percentage points from June 22. Soybean conditions did not deteriorate as much as corn. The “good” or “excellent” share of the corn crop fell 12 percentage points over the same period.
Demand for soybeans is also strong. Domestic crush now exceeds exports of US soybeans, mainly due to the use of soybean oil in biodiesel fuel. China exceeded its purchase commitment for 2025/26, with accumulated export inspections reaching 12.36 million tonnes by August 27 and purchases of nearly 8.5 million tonnes of 2026/27 US soybeans by early September. Chinese buyers also likely account for a portion of the 6.2 million tonnes purchased for “unknown” destinations.
Brazil’s Soybean Rally Gathers Pace as Exports Remain Robust
Brazil is also seeing prices rise to levels not seen in three years as its marketing season passes its peak. Export quotes at Brazil’s Paranaguá port are rising in parallel with FOB prices at US Gulf ports. Brazil’s CEPEA attributed rising prices to uncertainties related to the impacts of this year’s super El Niño, as well as firm global demand and Northern Hemisphere weather conditions.
CEPEA reports that some sellers are holding inventory off the market in anticipation of higher prices later and notes “fierce” competition for Brazilian soybean meal between domestic and foreign buyers.
Source: International Grain Council
Internal soybean prices in Brazil bottomed out during February-April following the harvest of its record crop, when prices in Paraná State were in a range of BRL 120-122/60kg. By August, the price had risen 18.7% to more than BRL 140. By comparison, prices in Brazil were relatively flat during 2025.
Source: CONAB
Brazil is moving out of its peak export season. Preliminary data from Brazil’s Comex showed soybean exports at 9.8 million tonnes in August, down from the seasonal peak of 16.8 million tonnes in April. The August total was slightly ahead of last year’s August volume. Both Comex and Brazil’s ANEC show cumulative exports for January-August 2026 running about 6 million tonnes ahead of the same period in 2025.
Source: COMEX
China was the destination for 7 million tonnes of Brazil’s August exports, representing 72% of the monthly volume. Exports to other destinations were spread across two dozen countries and regions, led by the EU (716,000 tonnes), Thailand (453,000 tonnes), Pakistan (321,000 tonnes), and Mexico (220,000 tonnes).
The August 2026 shipments from Brazil suggest ample supplies arriving in China during this year’s fall months. Unlike last year, China is buying US soybeans again this year, but purchases are being made by state-owned buyers. While they have booked nearly 8 million tonnes of US soybeans for 2026/27, that constitutes less than one month of Chinese import volume. It is not clear whether those beans will be crushed or stored in reserves. Private-sector Chinese buyers continue to buy mainly from Brazil due to China’s additional 10% tariff on US soybeans.
Rising Import Costs Lift Chinese Soybean Prices
In China, an increase in soybean prices during August paralleled the surge in US and Brazilian prices. China’s Dalian Commodity Exchange contract for GMO soybeans, which corresponds to imported soybeans, began a rally in August and posted a 9.8% cumulative rise by September 9. At the same time, an increase in the unit value of the 12.1 million tonnes of soybeans clearing Chinese customs in August, to USD 482/tonne from USD 462 in June, was a sign of the rising cost of imported soybeans.
Futures prices for soybean meal rose more than 10%, while soybean oil rose about 8% over the same period. These price increases defied weak demand conditions in China, reflected by persistently low hog prices. Parallel gains in Chinese and international soybean prices contrasted with soft prices for wheat and corn, which remain out of step with rising international prices.
Note: “No.1 soybeans” specifies non-GMO; “No. 2 soybeans” has no GMO restriction.
Source: China Dalian Commodity Exchange
Prices for Chinese domestic soybeans also rose, even though this market is largely segregated from the market for imported soybeans. China’s futures contract for non-GMO soybeans, primarily domestic beans for food use, also saw an upturn in early August. Bullish sentiment for domestic soybeans was bolstered by a series of typhoons that left waterlogged fields in China’s main soybean production region and threatened to reduce yields and protein content.
In China, there are also reports of traders holding domestic soybeans in warehouses in anticipation of higher prices in the fall months. Chinese authorities have been selling domestic soybeans from reserves to cool prices. During August, authorities auctioned more than 1.5 million tonnes of imported soybeans held in reserves, ostensibly to clear room for newly imported US soybeans. These auctions may also have had a secondary motive of boosting supplies and cooling prices as shipments from Brazil decline.
Chinese leader Xi Jinping’s visit to Washington, scheduled for September 24, is an event closely watched by the soybean market. Many presume that tariff cuts and progress on a bilateral trade deal will be beneficial for US-China soybean exports. However, the meeting’s timing during the peak export season for US soybeans poses a risk of further market disruption if no new agreement emerges or if there are delays in implementing new trade measures. There is also the potential for El Niño to affect South America and disrupt planting of the continent’s new soybean crop in late September.
