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May 01, 2025
By Jacquie Holland, ASA Economist
Through the week ending April 25, soybean futures contracts closed the week higher after tensions calmed slightly between the U.S. and China. Nearby May 2025 soybean futures gained $0.125/bu. (1%) this week to close near $10.4875/bu., notching a two-month high on Thursday due to a soyoil price rally. New crop November 2025 futures did not accelerate as quickly this week, only rising $0.015/bu. to $10.34/bu. at last glance.
Easing trade relations between the U.S. and China was a key driver for U.S. soybean markets this week. Negotiations with Japan and India on trade issues this week signaled to the market that the U.S. is looking to expand its based beyond China.
Showers in the Southern U.S. and Mississippi Delta in the coming days are likely to slow soybean planting, which was 8% complete as of Sunday, up from the five-year average of 5% for the same reporting period. Those showers should give way to clearer skies in 10 days or so, which will favor planting process.
Ag markets kept a close eye on the rhetoric exchanged between the U.S. and China this week in hopes of any signs of potential relief for the current high tariffs on U.S. ag products. On Tuesday, Treasury Secretary Scott Bessent told investors in a closed-door meeting with JPMorgan that he expects the trade conflict with China to deescalate.
On Wednesday, in response to President Trump proclaiming he would not “play hardball” with China, Chinese officials expressed willingness to work with the Trump administration, but cautioned, “China’s attitude towards the tariff war launched by the U.S. is quite clear: We don’t want to fight, but we are not afraid of it. If we fight, we will fight to the end; if we talk, the door is wide open.”
The Trump administration also claimed on Wednesday that it is actively in talks with Chinese officials, though a Chinese Foreign Ministry spokesman refuted these claims. As of Thursday, China had considered exempting some goods from U.S. tariffs, but ag and food products were not included on this list.
The signs of goodwill between the two countries are somewhat comforting to markets still rattled by the recent trade uncertainty, but trust between both countries has deteriorated significantly. These circumstances mean any trade negotiations are likely to be lengthy if and when they begin.
Meanwhile, the U.S. and India finalized the terms of reference for a bilateral trade deal this week, which would increase market access for U.S. farm goods in India. This is good news, especially on the heels of India’s soyoil purchases and orders in yesterday’s Export Sales report. However, it is important to remember that India restricts imports of genetically modified soybeans that are common in U.S. soy production.
Trade talks with India are a good sign of progress for U.S. ag trade, but the feasibility of a trade deal remains uncertain.
Even with weak energy prices this week after OPEC announced it was expecting to increase production, May 2025 soyoil futures rose $0.0162/lb. (3.4%) this week to $0.4949/lb. – a 1.3-month high.
India took ownership of a massive order of U.S. soyoil through the week ending April 17, according to yesterday’s Weekly Export Sales report. An unknown buyer transferred a sale of 42,000 MT to India. The U.S. also shipped a 42,000-metric-tonne shipment of soyoil to India during that same reporting week. India is the world’s largest vegetable oil importer.
At the global level, palm oil prices have dipped back below their soyoil counterpart in recent weeks, which has the potential to cool foreign purchases of U.S. soyoil. This week’s export shipping volumes for soyoil were rewarded by the market with higher prices, but next week’s report could return a different sentiment due to the lower prices.
Soymeal continues to stumble. Soymeal prices struggled against growing supply expectations while soyoil prices rallied to a 1.3-year high this week, but there was some good news for soymeal demand prospects late in the week. Thursday’s Weekly Export Sales report from USDA-FAS saw weekly soymeal shipments rise 31% from the prior week to 368,000 MT thanks to sizeable shipments to Morocco, Vietnam, Ecuador, and the Philippines.
It was a much-needed boost for soymeal export volumes. Before Thursday’s report, soymeal export volumes were about one load short of the same volume a marketing year prior—even though more soymeal supplies have been produced this year.
As expectations for increased soyoil usage for biofuels and exports grew this week, the sluggish soymeal shipping and domestic consumption prospects pushed May 2025 soymeal futures prices $7.4/ton (2.5%) lower to $288.2/ton by the end of the week.
In Central Illinois, soy crush margins ranged between $1.16/bu. to $1.38/bu. this week, down slightly from a range of $1.18/bu. to $1.38/bu. last week. Falling soymeal prices and an uptick in soybean prices led the slight weakening in the cash soy crush margin, despite cash bids for soyoil reaching nearly a 10-month high.
Another uptick in soyoil prices this week will keep crush margins profitable, incentivizing crush plants to offer more lucrative bids for the little soybean supplies remaining in the countryside. Soyoil’s portion of the crush margin’s share rose to 47.5% by Thursday, a 2.4-year high for the oil share.
As more shipments of freshly harvested Brazilian soybeans begin to arrive in China, China’s crush volumes rose through the week ending April 18. Soymeal stocks fell to an 11-year low last week due to the slower crush paces as Chinese crushers waited for Brazilian soybeans to arrive before ramping up production. Vegetable oil stocks also shrunk, with soybean and rapeseed oil supplies falling below increases in their palm oil counterpart.
Tight meal and oil stocks paired with an influx of Brazilian beans point to lucrative crush margins for Chinese plants in the near term.
At the end of last week and early this week, President Trump’s comments about firing Federal Reserve Chair Jerome Powell upended financial markets, pushing the dollar to a three-year low as investors fled the traditional safe haven asset in favor of, well, safer assets.
Central bankers across the globe spoke out in favor of Powell maintaining his chair, and President Trump ultimately backtracked statements about firing Powell. Damage continues to linger in the markets, however, as evidenced by growing concerns that the U.S. dollar could lose its status as the world’s reserve currency amid President Trump’s tariff policies and Powell musings.
The S&P 500 dropped to a two-week low on Monday but rebounded throughout the rest of the week after President Trump backed off the rhetoric surrounding firing Powell and began to sound slightly more cooperative with Chinese trade negotiations. The dollar index bounced back from its three-year low but continues to trade below the $100 benchmark.
The weakness in the stock market spilled over into the ag commodity trading space early in the week, with soybeans dipping to a one-week low before recovering those losses thanks to improving trade sentiments from the Trump administration throughout the week.
Through the week ending April 15, speculators boosted long positions in the soybean market, pushing soybeans to a net long position for the first time since late February 2025, which was prior to the tariff concerns that have pervaded ag markets and prices the past two months.
Managed money investors in the soybean market trimmed short positions by 44,946 lots in the week to Tuesday, bringing the total to 81,947 lots, a 10-week low. Meanwhile, soybean long positions jumped by 31,670 lots to 108,116 lots, marking a seven-week high.
During the reporting week, Chicago soybean futures rallied in relief after President Trump announced a 90-day pause on proposed tariff policies for countries that had not already retaliated against the U.S. Domestic stock volumes were also trimmed during that period on higher crush estimates.
The transition of managed money from a net short position to a net long added a layer of support to soybean prices this week.
