Soybeans Back to Mixed Trade on Thursday

Soybean markets are exhibiting mixed action, with nearby contracts slightly lower despite robust weekly export sales data showing 503,027 MT of soybeans sold, marking the largest total since mid-March and tripling last year's volume, alongside strong new crop and soybean meal sales. This demand strength is tempered by conflicting Brazilian production forecasts, as CONAB trimmed its 2024/25 estimate to 169.48 MMT while traders anticipate a slight increase from USDA, creating short-term price divergence and uncertainty regarding global supply.

Analysis

The soybean market is exhibiting a clear divergence, with nearby futures contracts declining while new-crop contracts are advancing. This price action is occurring despite strong underlying demand signals, as weekly export sales for old-crop soybeans reached 503,027 MT, the highest volume since mid-March and more than triple the amount from the same week last year. Demand for future supply is also robust, evidenced by new-crop sales hitting their second-highest total for the marketing year and exceptionally strong soybean meal sales, which included a significant forward commitment of 370,840 MT for the 2025/26 season. This bullish demand picture is being tempered by conflicting supply-side forecasts ahead of a key USDA report. While Brazil's CONAB agency slightly trimmed its 2024/25 production estimate to 169.48 MMT, traders anticipate the USDA will revise its estimate slightly higher to 169.4 MMT. This uncertainty over Brazilian output, combined with weak soybean oil sales of just 3,994 MT, is creating near-term price pressure and contributing to the mixed market sentiment.

Key Decisions for Investors

• Investors should note the divergence between nearby and new-crop futures, which may present spread trading opportunitiescapitalize on the contrasting short-term supply uncertainty versus long-term demand strength.
• The robust export sales figures, particularly the significant forward sales of soybean meal, provide a strong fundamental underpinning for a longer-term bullish outlook on the soy complex.
• The upcoming USDA report on Brazilian production is a key near-term catalyst for volatility; any significant deviation from the market's expectation of a 169.4 MMT crop could sharply move prices.