China demand and weather risks support soybean prices

The soybean market received another boost after the US Department of Agriculture confirmed the sale of an additional 472 thsd tons of US soybeans to China. The deal is seen as one of the largest recent export sales and has strengthened expectations that Chinese demand for US soybeans is recovering.

Market participants view the new purchases as evidence that the trade agreement between Washington and Beijing remains in effect. Soybean prices are also supported by strong US crushing activity, which could tighten ending stocks and strengthen the supply-demand balance in the new marketing year.

At the same time, global agricultural markets remain highly volatile due to geopolitical risks. Rising tensions in the Middle East and disruptions to shipping through the Strait of Hormuz continue to support crude oil prices, providing additional support to biofuel and oilseed markets.

Weather remains the key factor for US crops. Although corn and soybean yield potential is still considered favorable, forecasts for high temperatures during the early corn flowering stage have increased concerns about possible crop stress during a critical period for yield formation.

Market attention is now focused on the USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report, due on Friday. Any revisions to production, export, or ending stock forecasts could trigger another round of volatility across global grain and oilseed markets.