Market Commentary for 11/21/25
Last week, the USDA report showed the soybean carryout getting slightly smaller, between a yield reduction and increased crush demand.Some market participants are saying this may mean better bean prices down the road.
However, we may need to look deeper at export demand before getting too bullish on beans.As this Grain Stats chart shows, export movement has been painfully slow compared to last year and the 5-year average.
The USDA is now estimating export demand at the lowest level in 12 years, and it’s uncertain if that is even attainable.
The market is hoping the late-October trade deal will bring another 12 million metric tons (MMT) of additional demand from China by the end of January.So far, though, China has purchased less than 3 MMT since then, and none in the last few days.
Plus, when soybeans are above $11 futures, they are more expensive as compared with Brazil’s beans through winter.That price spread only worsens in the spring as Brazil’s bean crop is harvested.US beans then need to be closer to $10.50 to compete in the global export market based upon current market fundamentals.
Some market participants think the Chinese state-owned companies will buy beans, regardless of the price, to honor the trade deal.While no one knows if that will happen, it is unlikely the rest of the world will buy US beans if Brazil’s beans are cheaper.That could mean any potential gains from additional Chinese purchases will be offset by fewer US bean purchases from other global buyers.
As January approaches, Brazil’s weather will be closely watched in the main growing areas during their reproduction stage.Current weather forecasts do not suggest any problems, but as we have seen over the years, weather there can turn very quickly.
Bottomline:
Fundamentally, it’s unclear what could sustain these soybean futures values.It appears the market will keep a risk premium in place for at least another few weeks, hoping for some additional Chinese purchases.And obviously, a big weather issue in South America could drive prices higher too.For now, I expect volatility to continue in the bean market.
For questions—or to receive marketing content like this directly—connect with Jon at jon@schevegrain.com or schevegrain.com.
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