Soybeans Slide Lower Ahead of Trump/Xi Call on Friday

Soybean, soymeal, and soy oil futures experienced broad losses on Thursday, with soybeans down 6-7 cents, amid anticipation of trade discussions between President Trump and China's President Xi. Weekly export sales data showed 2025/26 soybean bookings down 47.2% year-over-year, with no purchases from China, while CONAB projected a significant increase in Brazil's 2025/26 soybean crop to 177.67 MMT due to expanded acreage, indicating potential for greater global supply.

Analysis

Soybean markets are facing significant bearish pressure, reflected in Thursday's price declines of 6 to 7 cents across most futures contracts. This downward momentum is driven by a confluence of weak demand signals and expectations of increased global supply. On the demand side, weekly export sales data for the 2025/26 crop, while up 70% from the prior week, were down a substantial 47.2% year-over-year. Critically, China was absent from the list of buyers, a key negative indicator for U.S. soybean demand. On the supply side, Brazil's agricultural agency CONAB is forecasting a record 2025/26 soybean crop of 177.67 MMT, an increase from the previous year's 171.47 MMT, driven by a 1.73 million hectare expansion in planted acreage. This projection of a larger competing crop from a major global producer is weighing on futures prices. The market is also factoring in geopolitical uncertainty, with traders awaiting the outcome of a scheduled phone call between the U.S. and Chinese presidents to discuss trade relations, which introduces potential for short-term volatility.

Key Decisions for Investors

• Given the dual pressures of weak export sales, particularly the lack of Chinese purchases, and a larger projected Brazilian crop, investors should be cautious about long positions as the fundamental outlook appears bearish.
• The upcoming phone call between U.S. and Chinese leaders on trade is a major short-term catalyst; prepare for heightened price volatility, as a positive outcome could trigger a short-covering rally while a negative one could accelerate the downtrend.
• Traders should closely monitor subsequent weekly export sales reports for any signs of Chinese buying, as a return of this key importer would be necessary to alter the current negative market sentiment.