Looking to the Futures

January Soybean Futures (/ZSF26) settled lower on Thursday for the fifth straight trading session, settling at $10.52 ¼. This marked a 6-cent decline from the previous day's close and a roughly 40-cent loss since last week. The CmdtyView national average cash bean price was about 5 and ¾ cents lower at $9.81 ¼. The Weekly Export Sales data posted Thursday morning showed 1.106 million metric tons in soybean sales reported for the week ending on 11/27. Estimates were in the 0.6-2 MMT range. Compared with the week prior, this result was a 52.3% decline and is less than half of what occurred during the same week last year. Accumulated sale commitments, both shipped and unshipped, came in at 21.829 MMT, which is 39.3% lower compared with the same period last year. It is safe to say this has been a tough year for the U.S.'s largest agricultural export and for the farmers that grow and depend on it.

With more than 40% of the nation's soybeans being exported to other countries, tariffs and trade uncertainty have had a major impact on Soybean prices and demand. According to the USDA, U.S. farmers received roughly $24.5 billion in 2024 from soybean exports. Of that $24.5 billion, Chinese purchases accounted for roughly $12.6 billion which is about twice the amount purchased by the next 5 largest export partners combined. China announcing earlier this year they would stop purchasing U.S. soybeans and begin buying from Brazil and other South American countries during the tariff negotiations, created lots of uncertainty around the crop. Optimism was renewed in October when trade agreements between the U.S. and China were reached with soybean exports being a major factor in the terms. With only 2 weeks left in the year, it is still yet to be seen if China will adhere to fulfilling this trade agreement commitment that was established.

With what feels like an eternity ago, China and the U.S. were able to agree on a very important trade agreement in October, which finally eased many of the tariff tensions that had been brewing between the two countries. Within this agreement, China agreed to purchase at least 12 MMT of U.S. soybeans by the end of the year and 25 MMT each year through 2028. This is well below their annual average of 29 MMT between 2020-2024 according to The Center for Strategic and International Studies, but still something that farmers hoped would help bring back some demand. This news caused Soybean prices to gap up, with Soybean Futures hitting year highs of nearly $11.70 back in mid-November. Since then, prices have declined rather sharply and according to USDA export sales data, China not yet fulfilling their promise could be a reason for that. China reportedly bought a few more cargoes of US beans on Wednesday and has likely purchased a little over half of their 12 million obligations. China's state stockpiler SinoGrain will hold another reserve auction on Friday and will auction 550,000 metric tons of imported soybeans. 

The Trump administration unveiled a $12 billion aid package on December 8th for one-time payments to row crop farmers to help offset a portion of their inflation and trade related losses in the 2025 crop year. The USDA is expected to announce payment rates for crops the week of December 22nd with payments limited to up to $155k per person or legal entity. Despite this federal aid package and lingering optimism around the tentative new deal with China, U.S. Soybean farmers appear to be heading into the new year with unsold harvests and uncertainty of what's to come.
 

Looking at the daily chart for /ZSF26, prices remained above the 200-day Simple Moving Average but crossed through and settled below the 100-day SMA for the first time since October 17th and remained below the 20 and 50-day SMAs. The 14-day RSI closed at 30.6174 signaling heavy selling pressure and sitting at oversold levels. Volume was below the 50-day volume average on Thursday with 96,322 contracts being traded compared with the 50-day average sitting at 149,670. According to the Daily Hightower Report, /ZSF26 may experience support at the 1047 ¼ and 1044 levels and resistance at 1057 ¼ and 1064 ¼. 

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