【Bean Sector Watch】Geopolitical trading cools down, focusing on USDA planting intentions report

(Source: CFC Commodity Strategy Research)

Author | Citic Construction Investment Futures Research and Development Department Liu Hao

Report Completion Date | March 27, 2026

Futures Trading Consultation Qualification: CSRC License [2011] No. 1461

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This week, the geopolitical trading’s transmission to the agricultural products sector has cooled, with the market refocusing on the fundamentals of U.S. soybeans. On the export front, this week a spokesperson from the White House stated that Trump plans to visit China in mid-May, which has renewed market expectations for new U.S. soybean exports. Therefore, the resumption of the visit may drive the U.S. market to recover part of the significant decline caused by Trump’s postponement of the visit last week. On the supply side, the USDA’s planting intentions report and quarterly inventory report will be released simultaneously at 12:00 AM Beijing time on April 1. Previously, the USDA projected in the February Agricultural Outlook Forum that the U.S. soybean planting area for 2026 would be 85 million acres, a significant increase from the previous year; the corn planting area would be 94 million acres, a decrease from the previous year. The USDA attributed the increase in soybean area to the relative advantage in soybean returns and the crop rotation demands in the corn belt and delta regions. Meanwhile, recent estimates from some institutions also revolve around this level, with an average expected U.S. soybean planting area of 85.549 million acres and corn planting area of 94.371 million acres. After the situation in the Middle East raised costs for fertilizers and fuels, how farmers will ultimately rebalance between returns, inputs, and crop choices remains one of the most closely watched variables in this report before the market.

From the market performance, aside from the significant daily decline in the U.S. market caused by Trump’s postponement of the visit last week, the CBOT soybeans have generally been in a process of gradual upward adjustment recently. Therefore, it is difficult to simply judge the extent to which the current rebound since around 1080 cents has priced in the expectation of increased soybean area in 2026. We generally believe that if this planting intentions report significantly exceeds the 85 million acres estimate, the U.S. market will still face certain downward pressure; however, the extent of the decline may not be fully realized, as the rising costs of fertilizers and fuels will likely provide some support to soybean prices through planting cost transmission. In other words, the expansion of area and rising costs will simultaneously affect the U.S. market in the short term—the former suppressing long-term supply expectations, and the latter raising the price center—until the USDA provides further calibration on new season planting costs in May. However, in the medium term, planting costs will be more reflected as sunk costs after crop sowing, so rising costs do not necessarily translate into a contraction in current season supply, and their bullish effect may ultimately be partially offset by increases in new season yields.

Domestically, this week Brazil and China discussed soybean export quarantine rules, leading the market to correct previous expectations regarding delays in Brazilian soybeans arriving at ports, causing continuous declines in soybean meal futures. Nevertheless, the Brazilian Ministry of Agriculture stated that both sides have not yet reached a consensus, suggesting that expectations for port delays may still fluctuate. Strategically, in the short term, we tend to look for short-selling opportunities in the 07 and 09 contracts. On one hand, under the assumption of normal arrivals at ports, the market will gradually trade the domestic supply pressure corresponding to South America’s bumper harvest, theoretically placing downward pressure on soybean meal pricing; on the other hand, even if Brazilian soybeans are delayed at ports in March-April, that supply pressure will likely be transmitted to May-June, thereby suppressing longer-term contracts. In other words, if the near-term port arrival topic cannot continue to develop, the market focus will still revert to expectations of looseness.

However, for the 09 contract, it is important to note that the trading window for the arrival of South American soybeans overlaps with the North American spring planting season, at which point the overseas market’s attention to U.S. weather and planting progress in April-May will significantly increase, and its pricing weight may also rise. One scenario is that if weather anomalies in U.S. soybean regions impede planting progress, the market will inject weather premiums into the U.S. market and drive soybean meal valuations higher through cost transmission, thus countering the bearish pressure from South American arrivals.

This week, the first soybean futures price has significantly corrected, and as the futures and spot prices gradually converge, the short-term space for a sharp downward move has narrowed compared to earlier periods. We understand that the core drivers mainly come from four aspects: first, after the cessation of state grain purchases, the policy support effect has faded, and the willingness of grain holders, including grassroots farmers and traders, to sell has increased, resulting in a rise in market circulation of soybeans. As of March 27, the net purchase price of 39% protein soybeans in Northeast production areas was 4600-4720 yuan/ton, down about 120 yuan/ton week-on-week; second, the recent market has modified its trading logic regarding the quarantine topic of Brazilian soybeans for export to China, resulting in some reversal of the risk premium formed around delays in imported soybeans arriving at ports; third, the state grain corporation has recently initiated a new round of auctions of old soybeans, releasing supply pressure; fourth, the geopolitical narrative’s spillover effect on first soybeans is marginally weakening.

Overall, the domestic soybean market remains in a relatively loose supply pattern. Compared to last year, the main change on the supply side this year is the adjustment in the structure of grain holders: at the beginning of the new season’s soybean listing, soybean sources are rapidly shifting from grassroots farmers to traders and grain points, leading to social stocks being more concentrated in the circulation link rather than directly remaining with farmers. Looking ahead, with rising temperatures, consumption of soybean products will enter a seasonal slack period, and the pace of social stock release may accelerate, which could continue to put pressure on spot prices. Meanwhile, attention must also be paid to the pace of reserve auctions. This week, the auction of soybeans saw a transaction rate slightly exceeding 60%, with a transaction price of about 4500 yuan/ton, indicating that the spot market still possesses some absorption capacity. However, if subsequent auctions become normalized, soybean prices may face pressure from increased supply. In the medium term, the logic of supply looseness is expected to return as the main pricing line, but limited remaining grain at the grassroots level also provides some bottom support for domestic soybean prices.

Researcher: Liu Hao

Futures Trading Consultation Practitioner Information: Z0021277

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