Looking to the Futures
Soybeans continue to rebound Wednesday
Soybeans hit their limit down Monday, falling 70 cents to $1155.25 per bushel. Soybeans have had a strong year thus far, beginning in January at 1047 cents/bushel and hitting a high just last Thursday at 1238.75. However, concerns began to rise as President Trump postponed a meeting with China’s Xi Jinping due to continued tensions in Strait of Hormuz. The meeting was set to take place in just two weeks. Spokesperson Karoline Leavitt said that the White House was working to secure a new date for the visit as soon as possible.
China fulfilled its commitment to buy 12 million metric tons of soybeans at the end of February, leaving the upcoming meeting pivotal for future trade on the beans. Currently China is expected to purchase 25 million tons of soybeans annually though 2028.
Domestic demand remains high per the WASDE report – Soybean crush increased by 5 million bushels in the month of February, driven by higher soybean meal domestic use. Imports also increased by 5 million bushels for the month, while total stocks remain unchanged.
Another major concern for soybeans is the rise in production costs because of the conflicts in the middle east. Not only could there be significant volatility in crude oil and natural gas, but also in fertilizers, which could weigh on prices. But most farmers have already made their crop choices and production decisions this season which means most of the inputs have already been ordered for the year.
U.S. crop size is still projected to rise from 81.2 million acres to 85 million for the year of 2026. Given normal weather conditions production could reach 4.45 billion bushels.
President Trump has invited both farmers and biofuel producers to the White House for the “celebration of agriculture” next week on the 27th. The event is expected to include hundreds of farmers and ranchers across the country to discuss renewable volume obligations, or RVO’s, which mandate the amount of biofuel or corn-based ethanol that will be added to the nation’s fuel supply.
Technicals
Today we have a 1-year, 1-day chart on May soybean futures (/ZSK26). Soybeans recently hit a high just last Thursday at 1238.75 just before having a limit-down move this past Monday. Moving almost 8% down before rebounding Tuesday and posting further gains this Wednesday.
However, even with the drop on Monday, soybeans are still up from their one year low of 969.5 set back on April 7th and trading close to the November high of 1169.5.
Soybeans crossed below the 9 and the 20-day moving average this past but remained above the 50 and 200. RSI also took a dive under the relatively strong 70-line, coming in at 50.71. Implied volatility comes in at 19.78 percent.
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