Chinese Soybean Demand Underpins Market as Prices Retreat Further This Week

Soybean futures experienced another challenging trading session heading into the weekend, with contract losses spanning 15-17 cents and January positions down a significant 28 cents for the week. The national cash bean benchmark retreated 17 cents to settle at $10.06 1/2, reflecting persistent selling pressure despite underlying demand signals from abroad.

Price Movement Across Complex and Oil Products

The soybean complex showed divergent performance across its components. Soybean meal futures gained ground with advances of 40 cents to $1.80 in near-term contracts, though deferred months closed lower, with January finishing 4.90 points down on the week. Soy oil contracts proved more vulnerable, posting declines of 55 to 83 points, and January specifically dropped 162 points week-over-week, signaling weakness in the broader oilseed sector.

Chinese Buying Activity Supports Underlying Demand

Despite the selloff, Chinese market activity provides a counterbalance to bearish sentiment. USDA data released this morning confirmed a private export arrangement of 132,000 MT destined for China, adding to accumulated purchases of 3.5 MMT through both daily flash sales and weekly aggregated data. Additionally, soybean meal shipments to Mexico totaled 104,328 MT, comprising 93,895 MT for the current marketing year and 10,433 MT for the subsequent period.

Sinograin, operating as China’s state reserve stockpiler, announced another auction for 513,000 MT of imported soybeans scheduled for next Tuesday, suggesting continued procurement efforts despite the recent price decline.

Positioning and Futures Market Dynamics

Updated Commitment of Traders data through November 18 revealed that speculative funds increased their net long exposure by 35,182 contracts, bringing the total net long position to 229,625 contracts—the largest accumulated positioning since October 2020. This concentration may influence price direction as traders digest the mixed signals between external demand and current selling momentum.

Expectations for Monday’s backlogged Export Sales report point to potential soybean sales of 0.8-3 MMT for the week ending November 20. Meal sales forecasts range from 100,000-450,000 MT, while bean oil sales may reach 5,000-25,000 MT.

Contract Settlement Summary

January 26 soybeans closed at $10.76 3/4, down 16 3/4 cents, with nearby cash beans at $10.06 1/2, down 17 cents. March 26 contracts finished at $10.86 3/4, declining 16 cents, while May 26 soybeans settled at $10.97, off 15 1/4 cents for the session.