Soybeans Pushing Higher on Friday AM Trade

Soybean futures are trading slightly higher this morning after facing pressure post-USDA release and closing lower on Thursday, with July '25 beans up 3 cents. Export sales data revealed a marketing year low for old crop soybeans at 61,394 MT, though new crop sales reached a four-week high; WASDE data showed no changes to US balance sheets, while global old crop stocks were raised 1.02 MMT to 124.2 MMT. Market participants are also monitoring crude oil prices, which are up following overnight strikes, and awaiting an expected EPA announcement on RVOs.

Analysis

Soybean futures are exhibiting a modest recovery, with prices up 1 to 3 cents on Friday morning, following a decline of 2 to 8 ¼ cents in the previous session post-USDA release, and a drop in preliminary open interest by 7,987 contracts. This price action unfolds amid mixed fundamental signals: U.S. old crop soybean export sales for the week of June 5th reached a marketing year low of 61,394 MT, although 2025/26 new crop sales hit a 4-week high at 58,086 MT. However, combined old and new crop sales were the lowest since February 2024, and soybean meal and oil export sales also showed weakness. The USDA's WASDE report kept U.S. old crop stocks unchanged at 350 million bushels (mbu) and new crop at 298 mbu. Conversely, global old crop soybean stocks were revised up by 1.02 MMT to 124.2 MMT, and the 2025/26 outlook increased by 0.97 MMT to 125.3 MMT, indicating a well-supplied global market. South American production estimates remain robust, with CONAB raising Brazil's crop forecast by 1.26 MMT to 169.6 MMT, and the Buenos Aires Grains Exchange estimating Argentina's crop at 50.3 MMT, largely aligning with or exceeding USDA's figures. External market factors include a significant $5.65/barrel rise in crude oil prices due to geopolitical tensions (Israel strikes on Iran), which is currently lending support to soy oil prices. The market also awaits an EPA announcement on Renewable Volume Obligations (RVOs), reportedly set for Friday, which could impact bean oil demand. The overall mildly negative sentiment (score -0.25) and specific negative sentiment for SOYB (-0.4) reflect these predominantly supply-heavy conditions despite the small intraday price gains.

Key Decisions for Investors

• Investors should exercise caution regarding new long positions in soybean futures (SOYB) due to the bearish pressure from increased global supply estimates, strong South American production, and weak U.S. old crop export sales, which largely overshadow the minor current price rebound.
• Closely monitor the upcoming EPA announcement on Renewable Volume Obligations (RVOs), as its outcome could significantly influence soybean oil demand, potentially creating distinct price movements within the soy complex.
• Evaluate potential short-term trading opportunities stemming from the divergence between soybean oil prices, currently supported by rising crude oil (positively impacting DBO), and the broader soybean market, which faces substantial supply-side headwinds.