As combines begin rolling through U.S. soybean fields, traders are grappling with a market shaped less by weather and yields and more by shifting global demand, uncertain biofuel policies, and China’s continued retreat from U.S. purchases.
“This isn’t a typical harvest season where we’re all fixated on yields,” said Erin Nazetta, director of food and agricultural research at Broadview Capital Holdings. “There are too many uncertainties for us to focus solely on crop size.”
The 2025 crop has enjoyed favorable weather, with good-to-excellent condition ratings holding in the upper 60% range for much of the season. Analysts expect a near-record yield. Yet futures markets have seesawed since mid-June, with new crop contracts falling 7.2% and rebounding 4.3% on drivers mostly unrelated to crop progress.
According to Nazetta, three major variables—production size, soybean oil demand, and soybean meal exports—are all injecting volatility into the market.
Large crop expectations and muted Chinese buying weigh heavily, but recent U.S. Department of Agriculture (USDA) data show resilient demand. The September 2 Fats and Oils: Oilseed Crushings report revealed that soybean crushings in July reached 6.14 million tons, up 4% from June and 6% higher than a year earlier. Production of soybean oil climbed 3.5% month-over-month and 5.6% year-over-year, while soybean meal output advanced 3.6% from June and 6.5% from 2024.
Stronger demand signals emerged in the same report: refined soybean oil use in July rose 5% from June, with inedible processing—often tied to industrial and biofuel use—up 9% from last year. Meanwhile, soybean cake and meal stocks fell 14% month-over-month and 11% year-over-year, suggesting strong pull from livestock and poultry producers.
“The animal protein sector has enjoyed solid margins, which has translated into strong meal consumption both domestically and abroad,” Nazetta noted.
Soybean oil demand remains more precarious. While USDA sharply raised 2024-25 oil export projections by more than 300% from the previous year, forecasts for 2025-26 drop steeply—down 73%—as biofuel sector demand proves increasingly volatile.
The divergence underscores a central paradox: even as crushing capacity expands and product volumes climb, long-term demand remains clouded by shifting trade flows and energy market dynamics. For growers and traders alike, this harvest may bring record yields but no clear path forward.
