Soybeans Mixed Early on Thursday

Soybean futures are trading near unchanged after Wednesday's losses, influenced by a decrease in open interest and forecasts of precipitation across much of the US. The market is also reacting to a US-China agreement on a framework to ease tensions, though tariffs remain in place. Export sales data is anticipated, with old crop bookings estimated between 100,000-500,000 MT, while analysts project a slight increase in US soybean carryout for both old and new crops and minor adjustments to South American production estimates, including an increase in Brazil's crop to 169.6 MMT.

Analysis

Soybean futures are exhibiting minimal movement early Thursday, trading within 2 cents of unchanged, following a decline in the Wednesday session where contracts fell 2 to 7 ¼ cents, primarily in nearby positions. This price action was accompanied by a reduction in preliminary open interest of 9,400 contracts, with a significant portion (24,741 contracts) exiting the July contract, suggesting position squaring. The cmdtyView Cash Bean price also reflected weakness, declining 10 3/4 cents to $10.02 1/2. While soymeal futures saw modest losses of $1 to $1.70/ton, soy oil posted gains of 5 to 23 points. Favorable weather outlooks, with NOAA forecasting precipitation across much of the US, could exert downward pressure on prices by potentially improving crop conditions. On the geopolitical front, a US-China agreement on a framework to ease trade tensions offers a positive signal; however, existing 10% Chinese tariffs on US goods remain, tempering immediate market impact. Market participants are keenly awaiting the morning's Export Sales data, with trade estimates for old crop bookings at 100,000-500,000 MT and new crop (2025/26) sales at 0-200,000 MT. Analyst expectations point towards an increase in US old crop soybean carryout by an average of 3 million bushels to 353 million bushels, and a slight rise in new crop carryout to 298 million bushels, both potentially bearish factors. Furthermore, South American production estimates contribute to supply concerns, with CONAB revising Brazil's soybean crop upwards by 1.26 MMT to 169.6 MMT, exceeding the general analyst consensus which anticipated a smaller increase to 169.3 MMT for Brazil and 49.1 MMT for Argentina.

Key Decisions for Investors

• Investors should closely monitor the forthcoming Export Sales data for indications of demand strength, especially given the mixed signals from US-China trade discussions where a framework agreement has been reached but 10% tariffs persist.
• The combination of anticipated increases in US soybean carryout, alongside upwardly revised South American production figures, particularly CONAB's Brazilian crop estimate of 169.6 MMT, suggests continued supply-side pressure that could cap price rallies.
• Traders should factor in the impact of forecasted precipitation across the US, as favorable weather could bolster crop prospects and exert further downward pressure on soybean prices.
• The notable reduction in open interest for July contracts signals position adjustments and potentially increased volatility around key data releases or contract expiries, warranting careful risk management.