Recent developments indicate a positive outlook. Yesterday, the U.S.-China trade talks yielded initial results. The head of the U.S.-China economic and trade negotiations explained the preliminary outcomes. Regarding expanding agricultural trade, both sides have reached a series of positive agreements to address non-tariff barriers and market access issues for certain agricultural products. They have also agreed in principle to include related products in a reciprocal tariff reduction framework and set indicative targets for expanding two-way agricultural trade.
Given the macro-level positive expectations, what is the current state of the soybean market, and what is the outlook?
Wang Liangliang, an agricultural product researcher at Founder CIFCO Futures, stated that the current U.S. soybean import CIF premium is $1 per bushel higher than Brazil's, making large-scale imports of U.S. soybeans this year unlikely.
Wu Xiaojie, an agricultural product researcher at Zhongzhou Futures, noted that although U.S. soybean production for the 2026/2027 season is estimated at 4.435 billion bushels (the second-highest in history), domestic crushing expectations in the U.S. have been significantly raised to 2.75 billion bushels due to increased demand for biodiesel. This has led to a reduction in ending stocks to 310 million bushels, tightening the supply-demand balance considerably.
"It is worth noting that due to competition from South America and tariff impacts, China's imports of U.S. soybeans in the first quarter of this year fell sharply by 70.51% year-on-year," added Liu Bingxin, an agricultural product researcher at Huishang Futures.
Regarding the domestic market, Wu Xiaojie analyzed that the current supply-demand mismatch has made the spot market feel a significant chill. Since May, South American soybeans have been arriving in large volumes, with oil mill operating rates steadily recovering and soybean meal output continuously increasing. As of May 19, soybean meal spot basis in East China has dropped to -140 yuan per ton, highlighting the growing pressure from ample supply.
Liu Bingxin mentioned that due to the large arrival of South American soybeans in the second quarter and high oil mill operating rates, coupled with weak downstream farming demand, soybean meal basis has turned negative. However, due to the current affordable prices, recent oil mill shipments have been acceptable. For the rapeseed meal market, Liu Bingxin cautioned that although the new season's rapeseed is about to hit the market, widespread rainfall in regions like Jianghuai over the next 10 days may cause lodging of rapeseed plants. It is expected that this year's rapeseed quality will be poor, and prices will remain low.
Looking ahead, Wang Liangliang believes that as the weather warms up, feed and farming consumption is improving sequentially. Recent soybean meal transactions at mainstream oil mills have rebounded, and coastal inventories have been declining continuously. Against the backdrop of low valuations and improving market sentiment, coupled with the positive impact of strengthening U.S. soybeans, the price of the soybean meal main contract may fluctuate and rise.
Wu Xiaojie stated that the core contradiction in the spot market lies in ample supply. Against the backdrop of continuous arrivals of South American soybeans, soybean meal spot prices are expected to continue fluctuating weakly, with basis under pressure.
Liu Bingxin indicated that heavy rainfall may affect summer-harvested grain and oil crops, and rapeseed meal prices are expected to remain subdued. It is recommended that downstream trading and feed enterprises take advantage of low prices, while individual investors should rationally avoid chasing rallies.
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