Soybeans Losses Continuing Early on Thursday

Soybean futures are extending recent declines, with nearbys down 4-6 cents Thursday following significant losses Wednesday, while soy oil also fell. This bearish market action comes despite a private export sale for 2025/26, as weekly Crop Progress data revealed a notable 4% drop in US soybean condition ratings to 65% good/excellent, intensifying supply concerns. An Allendale survey projects US soybean yield at 53.28 bu/acre and production at 4.268 billion bushels.

Analysis

Soybean futures are exhibiting continued bearish momentum, with contracts declining 4 to 6 cents in Thursday trading following more substantial losses of 9 to 10 cents in the prior session. This price weakness is mirrored in the physical market, where the national cash price fell to $9.54 1/4, and in related derivatives, with Soy Oil futures dropping 69 to 82 points. This downtrend is occurring despite fundamentally supportive news on the supply side. The latest weekly Crop Progress data revealed a significant deterioration in US soybean conditions, with ratings falling 4 percentage points to 65% good/excellent. The decline was acute in key states like Illinois and Ohio, which saw ratings drop 19 and 14 points, respectively, bringing the aggregate Brugler500 index down 8 points to 366. While a private export sale of 185,000 MT of soymeal was reported, its long-dated nature (2025/26) and the market's focus on falling crop quality and near-term price action appear to be the dominant factors for now.

Key Decisions for Investors

• Investors should note the significant divergence between the current bearish price action and the deteriorating US crop conditions, as continued declines in crop health could signal a potential floor or reversal point for futures.
• Monitor upcoming Crop Progress reports closely to determine if the 4% drop in condition ratings is an anomaly or the beginning of a sustained negative trend, which would add a supply-side risk premium to the market.
• The market is currently weighing negative price momentum against tightening supply fundamentals, suggesting that traders with long exposure via instruments like SOYB may consider hedging strategies until the impact of crop conditions on yield estimates becomes clearer.