SunSirs: USDA Report: Downward Revision of US Soybean Production and Inventories is Bullish

The USDA's November supply and demand report released on Friday showed downward revisions to US and global soybean production and inventories for the 2025/26 marketing year, indicating a tightening supply and demand situation, which may limit the downside for soybean prices. 2025/26 US Soybean Supply and Demand Data Adjustments: Production and Inventories Downgraded, Exports Lowered. The 2025/26 US soybean production forecast was lowered to 4.253 billion bushels, down 48 million bushels from the September forecast, and down 121 million bushels, or 2.8%, from the 2024/25 marketing year. The average analyst forecast was 4.266 billion bushels.

The USDA's November report lowered the 2025/26 US soybean production forecast to 4.253 billion bushels, down 48 million bushels from the previous forecast, a year-on-year decrease of 2.8%, while inventories were also lowered. This reflects a tightening global soybean supply and demand situation; reduced supply will directly support the rise in spot prices and limit the downside. The report's data, falling short of analysts' expectations (4.266 billion bushels), strengthened market confidence and significantly boosted bullish sentiment.

As a processed soybean product, soybean oil prices are significantly affected by raw material costs. Revisions in soybean production and inventory will push up raw material procurement costs, indirectly supporting higher spot prices for soybean oil. In a tight supply-demand environment, robust downstream demand may lead to supply shortages, which is beneficial for price trends.

Soybean meal is a major byproduct of soybean crushing, and reduced soybean supply will raise production costs. The report shows a decline in global soybean inventories, which may exacerbate supply pressure in the soybean meal spot market, especially given stable feed demand. The increased raw material costs will be passed on to soybean meal prices, making the bullish factors quite clear.

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