Soybeans Giving Some Gains Back Early on Friday

Soybean futures initially rose following a call between President Trump and President Xi regarding trade, but are trading lower Friday morning. Export sales data showed 194,345 MT of soybeans booked for 2024/25, up from last week and 2.5% higher year-over-year, while new crop business hit a 6-week low; soybean meal and oil sales also declined to 4-week and 5-week lows, respectively. Despite decreased sales, Census data revealed increased soybean, soybean meal, and bean oil exports in April, with bean oil exports reaching a 16-year high for the month.

Analysis

The soybean market demonstrated sensitivity to trade developments, with futures contracts initially gaining 6 to 9 cents on Thursday following a trade-centric phone call between U.S. President Trump and Chinese President Xi, which suggested ongoing dialogue. However, by Friday morning, these gains were partially eroded, with losses of 2 to 4 cents observed across most months. Export sales data for the 2024/25 crop in the week of May 29 presented a mixed outlook: total bookings of 194,345 MT were up from the prior week and 2.5% year-over-year, yet new crop business slumped to a 6-week low at 3,544 MT, and China reported 0 MT of unshipped sales on the books. Soybean meal sales of 264,940 MT and soybean oil sales of 11,780 MT also registered 4-week and 5-week lows respectively, indicating weakening forward demand for processed products. In contrast, April Census data indicated strong physical export performance: soybean shipments rose 23.17% year-over-year to 2.18 MMT, soybean meal exports hit a record 1.346 MMT for April (though down 15.55% from the previous month), and bean oil shipments surged to a 16-year high for the month at 159,050 MT. Global supply dynamics are further shaped by Brazil's increased May soybean shipments to 14.099 MMT and Argentina's harvest nearing completion at 88.7%, with a production forecast of 50 MMT. The cmdtyView Cash Bean price showed some resilience, rising 9 cents to $10.09, while preliminary open interest declined marginally by 497 contracts on Thursday.

Key Decisions for Investors

• Investors should closely monitor developments in U.S.-China trade discussions, as these remain a primary catalyst for short-term volatility in soybean prices.
• Carefully assess the divergence between strong current physical shipment volumes, especially for bean oil, and the recent slowdown in new crop bookings and processed product sales for insights into future demand trajectories.
• Factor in South American supply contributions, including Brazil's robust export pace and the progression of Argentina's 50 MMT harvest, as these will significantly influence global price equilibrium.
• Given the market's quick reversal of Thursday's gains and the mixed fundamental signals, maintain a cautious approach, looking for sustained buying interest and clearer demand signals before adopting a strong directional bias.