The suppressive force on soybean prices mainly comes from the profound transformation of the global supply chain. For the domestic market, the high import volume and high inventory data reflect the reshaping of the global supply chain.

Recent observations of the CBOT soybean futures market reveal a highly frustrating overall trend. Market participants believe that CBOT soybeans are in a transition period where the "old paradigm has failed, and the new paradigm has not yet been established," with the main contract trading within a specific range for several weeks. This is not only a trading range for soybean prices but also a buffer zone for the "severe conflict" in the global agricultural trade pricing logic. The current market lacks a unilateral driving force, and traders are waiting for new "gunshots" in a state of observation.

The delicate balance of the global market

In fact, the current soybean market is in a triangular game of "energy, food and currency". Wu Xiaojie, an agricultural product analyst at Zhongzhou Futures, said that the current support for soybean prices mainly comes from: First, the spillover effect from the energy side, after the disappearance of the geopolitical premium, the crude oil price has entered a high-volatility stage, which blocks the deep decline space of soybeans from the cost logic. Second, the game of demand expectations, there are market messages that China will reduce or cancel the import tariffs on US agricultural products, in order to implement the agreement to purchase 25 million tons of US soybeans every year. Although this message has not been confirmed by the Chinese side, the market expectations have a more obvious lifting effect on the soybean price, especially on the new contract of the distant month, which eliminates the possibility of a deep adjustment of the soybean futures price.

The suppressive force on soybean prices mainly comes from the profound changes in the global supply chain. Wu Xiaojie said that the progress of the US spring planting is significantly faster than last year, and the global phenomenon model shows that the probability of the El Niño phenomenon forming in the summer and autumn of 2026 has been greatly lifted. This indicates that the market may be experiencing a cycle from the past three years of La Niña phenomenon to the El Niño phenomenon. Behind this switch is the reconstruction of the global soybean inventory cycle. Once the expectation of bumper harvest is realized, combined with the continuous output of South American capacity, it will continue to suppress the US soybean futures. Brazil and Argentina are squeezing US soybean exports through a combination of "high yield + tax reduction".

Hui Shang Futures agricultural products analyst Liu Bingxin explained this state of play from another dimension. She analyzed that the current global soybean market is in a delicate balance between the increase in new-season supply and potential export expansion. Although the May supply and demand report from the US Department of Agriculture showed that the crushing and export volumes of US soybeans for the 2026/2027 marketing year have increased, this is more of a passive balance. Looking at the latest ENSO weekly report data, the probability of the El Niño phenomenon occurring in the third and fourth quarters of 2026 has risen to over 90%, indicating that this round of weather disruptions may be both intense and persistent. Referring to historical patterns, the strong El Niño phenomenon in the 2015/2016 marketing year led to a significant decline in soybean prices due to increased production. However, she also mentioned that recent US soybean crushing data has performed well. If the quarterly inventory report at the end of June shows a decline in inventory that exceeds expectations, it might briefly break the market's volatile pattern.

From "Weather Market" to "Policy Market"

Notably, the traditional drivers of the soybean market are changing. In years past, traders were watching satellite images of rainfall over the main producing regions. This year, they are keeping a close watch on the U.S. biodiesel bill and China's tariff list.

China's agricultural commodities futures analyst, Judy Zhu, revealed the "third way" that the United States is trying to break through — the energy transition. She believes that although the recent CBOT soybean prices are weak and fluctuating, the demand is showing a " estranged support" force. The continuous efforts of the US biodiesel and renewable diesel policies, the D4 RINs price (each D4 RIN is generated to prove compliance with the annual renewable fuel blend mandate set by the US Environmental Protection Agency for the production of one gallon of biodiesel or renewable diesel) is constantly breaking new highs, which is greatly boosting the demand for soybean oil and pushing the profit of soybean crushing in the United States to remain at a high level. This marks that the United States is trying to define soybeans as "energy crops" from the "cereal crop" definition in order to counter the low-price dumping of soybeans from South America. This transformation from "waiting for the weather" to "obeying policies" marks the further strengthening of the financial attributes of agricultural products.

But this transition is not yet complete, and the pressure on the supply side has arrived. Judy mentioned that relevant data show that the current planting progress of soybeans in the United States is significantly faster than the historical average, and the appropriate soil moisture continues to squeeze the weather premium. The disturbance of macro sentiment has added insult to injury, with speculative funds liquidating long positions and the weakness of wheat, corn and other varieties, making the market atmosphere for oilseeds relatively depressed. In addition, the expectation of a easing of the situation between the United States and Iran has led to a decline in oil prices, which has also removed the upward momentum from the oil and fat sector.

The Rebuilding and Pain of Inventory Cycle

For the domestic market, the high import volume and high inventory data reflect the reshaping of the global supply chain. Liu Bingxin said that although the import volume of soybeans to China in May to July is slightly lower than the historical peak level, it is still at the high level of the same period in the past 10 years. This massive supply has led to the continuous reduction of domestic soybean meal inventory, but under the huge import pressure, the price has not yet recovered. What is more worth paying attention to is the negative feedback from the downstream. At present, the profit of pig farming is still in the loss range, and the low pig prices greatly limit the purchasing willingness of feed enterprises. This structural contradiction of "massive import upstream and deep loss downstream" has formed the core logic that suppresses the spot price of soybean varieties.

To sum up, market participants believe that with the increasing probability of the El Nino phenomenon forming in 2026, the global soybean market, which has been in a "de-stocking cycle" for three years, is expected to end and enter a "restocking cycle". This means that unless there is an extreme geopolitical conflict that blocks logistics, it is difficult for the bean market to repeat the spectacular bull market of 2022. For traders, a single-sided trend market requires waiting for the guidance of weather, planting area, and policy. What the industrial chain enterprises should learn is to survive in the new normal of low volatility, high inventory, and downstream losses, which is more important than waiting for the emergence of a new trend market.

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