Soybeans Holding Gains on Friday Morning, after Breaking Higher on Thursday

Soybean futures surged Thursday, with front-month contracts gaining 18-20 cents, propelled by robust export demand, notably 1.143 MMT in new crop sales that exceeded estimates and marked a marketing year high, with significant volume to unknown destinations. Further market support came from positive ProFarmer Crop Tour data, showing Iowa and Minnesota pod counts significantly above historical averages. While the International Grains Council increased its 2025/26 global production and stock estimates, the immediate market reaction reflects strong current demand and favorable crop development.

Analysis

The soybean market is exhibiting significant price strength, with front-month futures rallying 18 to 20 cents, driven primarily by robust demand indicators. The latest Export Sales report was a key catalyst, showing new crop sales of 1.143 MMT, which surpassed expectations and marked a marketing year high. A large portion of this volume, 645,000 MT, was sold to an "unknown destination," pointing to substantial international demand. However, this bullish demand narrative is contrasted by increasingly bearish supply-side data. The ProFarmer Crop Tour revealed impressive yield potential, with soybean pod counts in Iowa and Minnesota running 12.9% and 19.9% above their respective 3-year averages. Furthermore, the International Grains Council has increased its 2025/26 global production and stocks forecast by 2 MMT each, signaling ample future supply. The market is also awaiting a key regulatory announcement from the EPA on Small Refinery Exemptions, adding a layer of uncertainty to the outlook.

Key Decisions for Investors

• Investors should acknowledge the strong near-term demand signals, evidenced by new crop export sales of 1.143 MMT that exceeded estimates, which could support current price levels.
• It is prudent to weigh the bullish demand against significant potential supply headwinds, as ProFarmer Crop Tour data shows pod counts in Iowa and Minnesota are well above historical averages, suggesting a large US harvest.
• Monitor the upcoming EPA decision on Small Refinery Exemptions, as this regulatory event is a key near-term variable that could directly impact soybean oil demand and create price volatility.