Soybean quotes rose by 1.8-2.6% amid reduced tariffs between the US and China, despite USDA's forecast for global production growth in 2025/26 MY

In its May supply and demand report, USDA experts presented the first global soybean balance for the 2025/26 MY, according to which global soybean stocks, production and consumption will increase in the new season. However, soybean quotes in Chicago rose by 1.8-2.6% yesterday against the backdrop of de-escalation of trade relations between the US and China and a reduction in the US crop forecast.

Compared to the April estimates , the world soybean balance for the 2024/25 MY is almost unchanged, as soybean harvest forecasts in Brazil and Argentina remain at 169 and 49 million tons (154.5 and 48.2 million tons last year), respectively, although local analysts have increased their estimates to 170-172 million tons for Brazil and 49.5-50 million tons for Argentina. After the harvest is completed, a further increase in harvest estimates in these countries can be expected, leading to an increase in stocks in the new season.

USDA experts predict that in the 2025/26 MY the world soybean balance will be as follows :

• Initial reserves will be 123.18 million tons (115.23 million tons in 2024/25 MY and 101.79 million tons in 2023/24 MY).
• Production will increase to 426.82 million tons (420.87 million tons in 2024/25 MY, 396.4 million tons in 2023/24 MY and 378.4 million tons in 2022/23 MY), in particular in Brazil – by 6 million tons to 175 million tons due to an increase in sowing areas, as well as in Paraguay, the Russian Federation and China, while production will decrease in the USA to 118.12 (118.84) million tons, as well as in Canada, Argentina, Ukraine and Uruguay.
• Global consumption will grow to 424.05 million tons (410.29 million tons in 2024/25MY, 383.3 million tons in 2023/24MY), in particular in China - by 5.1 to 133 million tons, in the USA - by 1.8 million tons, Brazil - by 1.2 million tons, and Argentina - by 0.4 million tons due to increased domestic processing.
• Exports will increase to 188.43 million tons (180.87 million tons in 2024/25 MY) and imports to 186.82 million tons (178.16 million tons) due to an increase in imports by China by 4 million tons to 112 million tons.
• Final reserves will be 124.33 million tons (123.18 million tons), although analysts estimated them at 126 million tons.

Based on the USDA report, July soybean futures in Chicago rose by 1.8% to $393.6/t (+4% compared to data after the April report), and November futures rose by 2.6% to $388.6/t (+5.3%), but the price was most supported by the reduction in tariffs for China and hopes for the resumption of soybean exports from the US to China.

Weather conditions in the US are favorable for soybean planting, so with China's tariff reductions, farmers may significantly increase the area sown, which could push prices down in June. As of May 11, 48% of the planned area has been sown with soybeans in the US (37% on average over 5 years).