Soybeans Close with Weakness on Thursday

Soybean futures declined following the USDA's unchanged U.S. balance sheets for old and new crop supply and demand, while global old crop stocks were raised by 1.02 MMT to 124.2 MMT. Export sales data revealed a marketing year low of 61,394 MT for old crop soybeans, with reductions from unknown destinations offsetting sales to Indonesia and Egypt; combined old and new crop sales hit their lowest since February. Soybean oil faced pressure ahead of a pending EPA announcement on RVOs.

Analysis

Soybean futures experienced downward pressure following the USDA's latest report, with contracts closing 2 to 8 ¼ cents lower; notably, Jul 25 Soybeans settled at $10.42 1/4, down 8 1/4 cents. The cmdtyView Cash Bean price mirrored this decline, falling 7 1/2 cents to $9.95 3/4. While soymeal futures showed modest gains of 10 to 50 cents per ton, soybean oil futures posted losses between 28 and 41 points, partly attributed to anticipation of an Environmental Protection Agency (EPA) announcement on Renewable Volume Obligations (RVOs) reportedly due Friday. Export sales data underscored weak demand, with old crop soybean business for the week of June 5th hitting a marketing year low at 61,394 metric tons (MT); despite sales to Indonesia (69,400 MT) and Egypt (58,500 MT), net reductions from unknown destinations (260,700 MT) weighed heavily. Combined old and new crop sales registered their lowest point since February 2024. Similarly, soybean meal 2024/25 export business reached a 5-week low at 214,533 MT, and total soybean oil sales of 4,097 MT were also the lowest since February. The World Agricultural Supply and Demand Estimates (WASDE) report indicated no changes to U.S. old and new crop supply and demand balance sheets, with stocks remaining at 350 million bushels (mbu) and 298 mbu respectively. However, global old crop stocks were revised upwards by 1.02 million metric tons (MMT) to 124.2 MMT, and the 2025/26 global outlook increased by 0.97 MMT to 125.3 MMT. USDA’s production estimates for Argentina (49 MMT) and Brazil (169 MMT) were unchanged, though Brazil's agricultural agency CONAB reported a slightly higher Brazilian crop at 169.6 MMT and the Buenos Aires Grains Exchange estimated Argentina's crop at 50.3 MMT, suggesting ample South American supply.

Key Decisions for Investors

• Given the strongly negative sentiment, multi-month low export sales, increased global stock projections, and largely unchanged U.S. fundamentals, investors should exercise caution with existing long positions in soybean futures and reconsider initiating new ones until demand signals improve.
• The impending EPA announcement on Renewable Volume Obligations is a significant short-term catalyst, particularly for soybean oil, and its outcome could introduce further volatility or a directional shift in the soy complex; positions should be managed accordingly.
• Investors should meticulously track upcoming weekly export sales data for any indication of a rebound in international demand, as the current anemic sales pace is a primary driver of bearish pressure on soybean prices.