Looking to the Futures

Soybeans continued their rally to start the week as traders remain optimistic that China will continue their buying. However, China continues to buy beans from Brazil at lower levels than current US prices. Soybean meal prices remain strong as the supply side remains tight. Updated US crop production from the USDA will be released late next week providing markets with more than estimates to work off. Brazil’s planting season is underway and we are seeing rain in their forecast, which would be bullish for bean production.

Soybeans saw a surge in buying pressure last week as President Trump and President Xi reached a tentative trade agreement. In negotiations China agreed to buy 12 million metric tons of US soybeans before the end of January 2026 and 25 million metric tons annually for the next three years. Soybean prices traded to a 15-month high following the tariff negotiations. Last week China purchased 430,000 tons of US soybeans, which is equivalent to about 7 cargoes. Traders are optimistic that China will significantly increase these purchases if they are going to meet the 12 million metric ton agreement by the end of January 2026.

However, Brazil faced negative effects following the US-China Trade deal. Bean values in Brazil dropped over the weekend; China purchased 10 cargoes of Brazil soybeans for December delivery and 10 cargoes of Brazil soybeans for March delivery at prices lower than US levels. 

Soybean meal supply remains tight and deforestation regulations in the EU may increase demand for US soybean meal. This law will require companies to prove that certain products sold in the EU do not cause deforestation or forest degradation. The law applies to commodities like soy, beef, coffee, timber, and cocoa. The enforcement of this regulation is scheduled to begin December 30,2025.

Last Friday the USDA announced that they will release updated crop production and supply and demand estimates on November 14. According to Hightower Research, US bean harvest is estimated around 92% against the 85% average. 

There were 207 November bean deliveries on Sunday night, bringing the total to 884 for the month. Export inspections data shows 965,063 metric tons of soybeans were shipped in the week that ended October 30. This was a -16.8% drop w/w and -58.3% below the same time last year. 

On the production side AgRural estimates that Brazil is 47% done with planting as of last Thursday, which is behind the 54% pace from last year. However, recent rain in the region has improved soil conditions following a dry spell that could increase production.

Looking at the Soybean January 2026 Futures (/ZSF26) contract we can see the significant buying pressure over the past week on above average volume. Prices were hovering around the 200-Day Simple Moving Average prior to this recent move but have skyrocketed well above this level. Last Wednesday we saw the 20-Day SMA cross the 50-Day and 200-Day SMA price points, which could indicate a continuation of this bull run. 

The Daily Technical Summary from Hightower Research has support levels at 1108-0 and 1097-25 with resistance levels at 1122-5 and 1126-5. Both areas of support were broken during yesterday's session.

According to the CFTC Commitment of Traders report released September 23^rd managed money traders decreased their long position by -5,949 and increased their short position by +18,981 contracts. Managed money traders were net short -24,742 contracts as of the time this was written. Some of the past week’s recent rally could have been attributed to managed money short covering.

The 14-Day Relative Strength Index at 82.40% indicates the contract has moved into overbought territory.

20-Day SMA                   1059-3

50-Day SMA                   1053-0

200-Day SMA                 1045-6

14-Day RSI                      82.40%

Implied Volatility            14.36%

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