StoneX’s Arlland Sudterman argues the soybean market is being driven by two forces: a comfortable U.S. supply outlook and the possibility that China ultimately buys more U.S. beans for political rather than economic reasons. Near term, he thinks weather is mostly favorable and funds are leaning bearish on old-crop beans, while new-crop November beans are better supported by soy oil strength and by uncertainty around Chinese demand.
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Arlland Sudterman, StoneX’s chief commodities economist, opens by framing the soybean market as a balance-sheet story with a political overlay from China. His core thesis is that the U.S. supply picture is currently comfortable enough to keep old-crop prices under pressure, but the real upside risk comes from whether China follows through on a promised purchase program large enough to materially tighten the new-crop balance sheet. He says the market has been liquidating grain and oilseed positions, crop ratings are solid, and rainfall forecasts are generally improving the crop outlook, which is why funds are not worried about shortages right now. On the supply side, he walks through USDA’s current new-crop assumptions: 4.435 billion bushels of production on 84.7 million acres, 25 million bushels of imports, and 340 million bushels of beginning stocks. …
Tactically, soybeans look pressured on the old-crop side while new-crop support depends on whether China starts showing up in export sales. Near-term rallies are vulnerable unless the market sees concrete buying or a surprise weather scare.
Over the next few months, the base case is a fairly well-supplied U.S. balance sheet with stronger crush and export demand as the key swing. Confirmation comes from export flashes and weekly sales; without Chinese purchases, USDA export estimates likely drift lower.
Structurally, soybean pricing is becoming a function of policy leverage and global origin arbitrage, not just harvest size. South America’s scale and China’s bargaining behavior may cap U.S. share unless U.S. prices become materially more competitive.
The soybean market is currently being driven by a comfortable supply outlook and by uncertainty over Chinese buying.
He repeatedly contrasts ample crop expectations with China as the main demand swing factor.
US soybean crop ratings and weather look good enough that funds are not worried about crop shortages.
He cites 68% good-to-excellent ratings, seasonal norms, and rain forecasts as supportive of the crop.
USDA’s new-crop soybean production assumption is around 4.435 billion bushels and may rise modestly on June 30.
He says acreage and yield estimates could be nudged up in the next USDA update.
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