Market Commentary for 9/26/25
Early soybean yield reports have been very good.However, I’ve talked with many farmers in the eastern growing regions who are worried the later planted soybeans, that had to endure the dry late August weather, are going to have lower yields.
While total planted acres have been reduced since the June USDA report, the absence of Chinese soybean purchases is anything but bullish.Many are still hoping for a trade deal between Trump and Xi, but the window for that is closing in the next few months.By February, Brazil will start harvesting their next soybean crop, which will become competition to US beans.
Export Demand
The absence of Chinese soybean sales is concerning, but the USDA has already lowered export estimates for the coming year to account for it. Current projections are for a level that is nearly the lowest in 11 years.
The 2018/2019 drop was when the first trade war started, and the 2019/2020 decrease was likely related to Covid and swine flu disease in China.So, the USDA’s export pace forecast is similar to other low demand years.
Crush Demand:
US soybean crush has increased steadily over the last 11 years.
The soybean crush is likely what is supporting bean prices, which highlights why continued support for the biofuel mandate matters.Each new US plant benefits producers, even if it’s hundreds of miles away from their farm.The more domestic demand we have, the less reliant US farmers need to be on politics and foreign markets.
Carryout
Comparing carryout and/or the stocks to use ratio from the last 11 years, shows that carryout is significantly lower now than during the first trade war.
This year’s situation seems to be completely different and may not be as bad as it seems.Therefore, the absence of Chinese purchases may not hurt the US as much as some worry it could.
Supply
The big question is what the US soybean yields will be.The USDA is forecasting 2 bushels above the trend.August weather is critical to bean yields, and the eastern soybean belt was very dry through August.
While the dry August weather may impact some yields, more and more farmers are planting soybeans earlier, or shorter season varieties, to avoid the worst of August dry weather.Plus, early field reports are suggesting excellent yields, even in the driest parts of the US.Even if soybean yields are reduced by 1–1.5 bushels per acre, carryout would remain tight as long as the current export estimate is met.
Bottomline
Moving forward, soybean’s biggest issue will be Brazil’s steadily increasing production every year, and Chinese demand not keeping up with Brazil’s expansion.That makes US biofuel production increasingly important for US soybean farmers.Brazil has already expanded ethanol production to process more corn, hopefully they turn to making a lot of soybean biofuels in the near future too.
For questions—or to receive marketing content like this directly—connect with Jon at jon@schevegrain.com or schevegrain.com.
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