Insight Focus
Soybean prices fall on supply strength and demand doubts. Strong US crop prospects, favourable weather, macro pressure, and a lack of confirmed China buying drove a 6% drop in futures alongside weaker export prices. Ample South American supply and rising exports, combined with weak Chinese demand and deteriorating crush margins, continue to cap any near-term price recovery.
Soybean Prices Fall on Crop Strength and Demand Concerns
US soybean prices tumbled during the first week of June under the influence of multiple bearish factors. The Chicago futures price dropped from USD 11.95 on May 28 to USD 11.22 on June 5, a 6% decline. Spot prices for exports at Gulf ports declined in parallel, falling from USD 12.98 to USD 12.27 and narrowing the spread between US and Brazilian export prices.
The June 1 USDA crop conditions was one bearish factor weighing on soybean prices. Previously, USDA had estimated that this year’s soybean acreage increased by 3.5 million acres, and the crop conditions report indicated the potential for strong yields. As of May 31, soybean planting was 87% complete and seedling emergence was 65%, both up from last year. The first crop rating report showed 66% of the crop rated good to excellent. Above-normal rainfall was forecast across most of the US Midwest and was expected to improve soil moisture.
Macroeconomic conditions also affected the soybean market. A report showing robust job growth raised expectations of an interest rate hike this year, strengthening the dollar and triggering a sell-off of risk assets—including agricultural commodities. An easing of crude oil prices following the most recent news of progress on US-Iran negotiations contributed to a decline in oilseeds and other biofuel-related commodities.
With signals of a large US crop, growing scepticism about China’s pledge to buy 25 million tonnes of US soybeans during 2026 was another bearish factor. US officials gave assurances that China is about to begin buying, but no new-crop sales to China had been formally announced by the first week of June—three months ahead of the US harvest.
USDA export sales data showed sales of 75,000 tonnes of old-crop soybeans to China. Sales of new-crop soybeans totalling 243,000 tonnes included 132,000 tonnes for unknown destinations, but none were declared as Chinese purchases.
Record Exports and Ample Supply Reinforce Bearish Outlook
Supply pressure is also bearish. Brazil’s soybean harvest of about 130 million tonnes is essentially finished, and its peak export season is in full swing. In Argentina, the harvest is 91.7% complete, with one of the best yields on record, according to a June 4 Buenos Aires Grain Exchange report. The Exchange raised its estimate of the Argentine crop to 50 million tonnes, exceeding USDA’s estimate of 48 million tonnes.
Argentina’s production could expand next year, as authorities announced that the country will phase in reduced export taxes for soybeans. The tax will gradually be cut beginning in January 2027 from the current 24% to 15% in 2028, but it is unclear whether the reductions will be permanent. A temporary suspension of the duty during September–October 2025 led to a spurt of exports.
According to official trade data, Brazil’s soybean exports reached a seasonal peak of 16.8 million tonnes in April and totalled 14.8 million tonnes in May. Both values exceeded year-ago export volumes. China was the destination for 10.5 million tonnes in May, followed by Spain (583,354 tonnes), Türkiye (540,500 tonnes), the Netherlands (430,428 tonnes), Thailand (415,934 tonnes), and Pakistan (410,714 tonnes).
Source: Comex
From January to May, Brazil’s cumulative soybean exports totalled 55.1 million tonnes, of which 38.1 million tonnes (69%) were bound for China. This year’s January–May total is 3.5 million tonnes ahead of last year’s pace. Exports to China are on the same pace as a year ago, while exports to other major partners grew. January–May 2026 exports to Türkiye were up 764,000 tonnes from a year earlier; exports to the Netherlands were up 696,000 tonnes; exports to Thailand were up 484,000 tonnes; exports to Bangladesh were up 453,000 tonnes; and exports to Vietnam were up 390,000 tonnes. Exports to Iraq fell by 416,000 tonnes and exports to Iran fell by 380,000 tonnes year over year.
Source: Comex
US soybean exports were in their seasonal low period during May, with 2.32 million tonnes inspected for export that month, down from a January peak of 5.9 million tonnes. China was the top destination in May, with 953,000 tonnes inspected. Other top destinations for US soybeans during May were Egypt (419,216 tonnes), Mexico (339,867 tonnes), and Indonesia (211,261 tonnes).
The US exported a cumulative total of 11.56 million tonnes to China for the 2025/26 marketing year through May, nearly completing shipments of the 12 million tonne purchase commitment made at the October 30 US-China summit. Exports to other destinations totalled 24.1 million tonnes. The total of 35.7 million tonnes of US soybeans exported to all destinations for the 2025/26 marketing year through May is down by 9 million tonnes from a year earlier.
Source: USDA
Soybean arrivals in China reached their seasonal peak in May 2026, with imports totalling 11.8 million tonnes. That total was up from 8.5 million tonnes in April, but it fell short of the monthly record of 13.9 million tonnes set in May 2025. China has not yet released data showing the origin of imports for May, but the influx of soybeans reflects increased arrivals from Brazil. Cumulative imports from January to May total 36.56 million tonnes, nearly matching the pace for the same period last year.
Weak Crush Margins and Soft Demand Pressure China Market
Chinese soybean meal prices dropped as the volume of soybeans arriving at ports increased, crush volumes rose, and soybean meal inventories accumulated.
The decline in Chicago futures prices also put downward pressure on soybean meal prices in China during the first week of June. Demand has been crimped by a contractionary phase in the hog sector—the largest consumer of soybean meal in China—after plummeting hog prices led to financial losses for most producers and authorities rolled out a new intervention system to cut production capacity.
Soybean oil prices have also been retreating, causing crushing margins in China to deteriorate. The pace of exports from Brazil and the US suggests that arrivals of imported soybeans in China will increase in June and remain strong during the summer months, offering little prospect of a rebound in crushing margins.
The relatively weak market conditions in China help explain why growth in Brazil’s exports has been focused on non-China destinations in Europe, Türkiye, and Asia. The saturated Chinese market is also unfavourable for meeting China’s commitment to buy 25 million tonnes from the US this year.
