Due to the decline in the excellent and good rate of US beans, China's continued procurement, geopolitical risks, and El Niño expectations, the trend of US beans is strong, but it is necessary to be vigilant against the risk of a pullback caused by the departure of long profits.

Recently, the futures price of US beans and Dalian soybean meal continued to rise under the resonance of multiple factors. As of the close on the morning of September 1, the main contract price of CBOT soybean futures was quoted at 1296 cents/bushel, and the week-on-week ratio rose by 4.7%; the main contract price of Dalian soybean meal futures followed the cost side. At the spot level, on September 1, the spot price of soybean meal in East China was 3,200 RMB/ton, and the week-on-week ratio rose by 130 RMB/ton; the spot basis price was -170 RMB/ton, and the week-on-week ratio was basically flat, reflecting that the spot price was weaker than the futures market.

The simultaneous strong rally of CBOT soybeans and domestic soybean meal futures in this round has been driven by a combination of multiple factors.

First, the recent breakdown in peace talks between Russia and Ukraine has led to a renewed escalation of the conflict. Both sides have launched drone attacks on the Black Sea coast, resulting in the suspension of operations at three major Russian grain export terminals. The combined annual throughput of these terminals stands at 24.6 million tons, accounting for approximately 75% of Russia's total Black Sea grain shipments. Russia and Ukraine are core exporting countries of global agricultural products such as wheat, corn and sunflower seeds, and they occupy a pivotal position in international grain trade. The escalation of the conflict has significantly amplified market concerns about the global agricultural product supply, driving up international grain prices, and the upward sentiment has further spilled over into the soybean market.

Secondly, the conflict in the Middle East has disrupted the global supply of chemical fertilizers, and South American countries such as Brazil and Argentina are highly dependent on chemical fertilizer imports. According to the agency's estimate, Brazil's fertilizer imports in 2026 will be 40.50 million to 41 million tons, a decrease of 11% year-on-year. This will cause Brazil's 2026/2027 harvest season to fall in fertilizer intensity, or pressure production output, and the market will also lower production expectations for crops such as soybeans and corn.

Finally, in the context of the El Niño climate, the market is worried about the decline in the production of many types of agricultural products around the world. According to relevant agencies, the probability of rainfall in northern and central and western Brazil from October to December this year is lower than usual is more than 70%, which may have an adverse impact on local soybean growth. Taking the El Niño year 2015 as a reference, Brazil's soybean production decreased by 1.40 million tons year-on-year. Driven by multiple factors, since June, a number of international mainstream investment banks have been bullish on the international agricultural product market, believing that under the dual role of super El Niño and geopolitical conflicts in many places, agricultural product prices are expected to start an upward cycle running through the first half of 2027.

The short-term bullish factors also support the disk. In the past six weeks, the excellent and good rate of US beans has declined continuously, and as of this week it has fallen to 58%, which is lower than market estimates and the level of the same period last year. The US Department of Agriculture's September supply and demand report is about to be released, and the market expects that there is room for downward adjustment in US bean production, and the supply and demand balance of US beans in 2026/2027 tends to tighten.

At the same time, China's procurement has been steadily advancing. As of August 20, the cumulative export sales of US beans in 2026/2027 were 14.33 million tons, compared with 10.16 million tons and 7.23 million tons in the same period of the previous two years, of which 6.79 million tons were sold to China. The market expects that China may maintain a weekly procurement rhythm of 1 million to 1.50 million tons of US beans before late September, providing a solid bottom support for the price of US beans.

The domestic soybean meal market is dominated by cost transmission logic. Driven by the price of CBOT soybeans and the rise in Brazil's discount, the procurement cost of domestic commercial imported soybeans has continued to rise. As of last Friday, the import cost of Brazilian soybeans for shipping in November has risen to 4,350 RMB/ton, compared with 4,239 RMB/ton in the previous week and 4,181 RMB/ton in the same period last month, an obvious increase. The cost of imported soybeans is a major component of domestic soybean meal pricing, and the upward shift in cost focus continues to drive domestic soybean meal prices higher.

But there are still real pressures in the soybean industry chain. In the international market, the supply pressure of old crops in Brazil continues to be transmitted to new crops. Last week, Brazilian farmers sold about 4 million tons. According to the forecast of Anec (Brazilian Grain Exporters Association), Brazilian soybeans exported 10.25 million tons in August, and the cumulative export from January to August was 93.23 million tons, an increase of 6.66 million tons year-on-year. The global short-term supply of soybeans is still relatively abundant. Although the domestic spot price follows the disk upward, the fundamentals of supply and demand have not improved substantially. In the third quarter, the scale of imported soybeans to Hong Kong was relatively high, the crushing operation rate of oil plants remained high, and the soybean meal inventory accumulated to 1.20 million tons. Some oil plants appeared to expand and urge the withdrawal. At the same time, the downstream was not willing to purchase high-priced soybean meal, and the spot basis fell back to less than 150 RMB/

Overall, supported by the decline in the excellent rate of US beans, China's continued procurement, geopolitical risks, and El Niño expectations, the trend of US beans is relatively strong, but it is necessary to be vigilant against the risk of pullback caused by the departure of long profits, and it is not advisable to chase high. The price of the main contract of domestic soybean meal futures is already at a high level this year, and you can wait for the pullback before laying out long opportunities.

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