Author: Grant Gardner

Following strong prices in 2022 and 2023, soybean values have fallen sharply from highs above $14 per bushel to current levels near $10.00 across much of the United States. While prices have recently rebounded on news of renewed Chinese buying, soybeans are still projected to generate negative returns during the 2025/26 marketing year. Looking ahead to 2026/27, November 2026 soybean futures are trading near $11.10. Assuming a -$0.50 harvest basis, a trend yield of 55 bushels per acre, and $650 per acre in input costs, estimated returns still imply roughly a $67 per-acre loss.

While it is still early and profitable prices could emerge, the signal remains clear: soybean supply continues to outpace demand at current production levels, and without stronger and sustained demand growth, profitability will remain elusive.

Between 2019 and 2022, U.S. soybeans were split roughly between exports (44%) and domestic crush (47%), with the remainder going to seed, feed, residual use, or ending stocks (Oilseed Yearbook, 2025). Recently, crush expansion has boosted domestic demand, but exports have declined, particularly due to reduced Chinese purchases (Gerlt, 2025). The U.S. recently negotiated a trade agreement under which China will purchase 12 million metric tons (MMT) of U.S. soybeans by January 2026, followed by 25 MMT annually from 2027 through 2029. This level would return Chinese buying close to 2024/25 volumes (Clayton, 2025). While the agreement provides some near-term support, questions remain about fulfillment and what happens beyond 2029.

In the near term, renewed Chinese buying represents the most direct path back to profitability. Crush expansion is important but largely anticipated by markets and will ramp up gradually; it cannot immediately offset recent export weakness. Meanwhile, China remains by far the dominant global buyer: in 2022, China imported more soybeans than all other countries combined, with the rest of the world accounting for just 61% of China’s import value (Figure 1). Over the long run, diversifying export markets can reduce reliance on China and lower price risk, but fully replacing Chinese demand is unrealistic.

Longer-term, continued crush growth provides a pathway to tighter balance sheets. Figure 2 illustrates how expanded crush capacity could increase domestic use even if Chinese purchases do not return to prior highs. Projected crush use climbs steadily after 2025 (Gerlt, 2025), supported by renewable diesel and other biofuel investments that may anchor domestic soybean demand going forward. If exports can stabilize near current projections, or strengthen modestly, the combination of incremental trade growth and rising domestic crush could gradually restore profitability. The recent trade agreement may buy time, but building durable demand outside of China will be essential to a more resilient soybean market beyond 2029.

Figure 1: World Demand for Soybeans Outside of China, 2022

Figure 2: Soybean Supply, Demand, and Projected Crush Expansion

Citations: 

Clayton, Chris. “Trump Champions Soy Deal for Farmers.” Progressive Farmer. October 30, 2025. https://www.dtnpf.com/agriculture/web/ag/news/article/2025/10/30/bessent-china-agrees-buy-nearly-1-us

Gardner, Grant. “Major Players in US Trade and Grain Market Volatility.” Southern Ag Today 5(15.3). April 9, 2025. Permalink

Gerlt, Scott. (2025, April 10). Soybean Crush Expansion, 2025 Update. American Soybean Association. Retrieved from https://soygrowers.com/news-releases/soybean-crush-expansion-2025-update/

U.S. Department of Agriculture, Economic Research Service. (2025). Oil Crops Yearbook [Data set]. U.S. Department of Agriculture.

World Bank (n.d.). World Integrated Trade Solution (WITS) [Data set]. Accessed via WITS: https://wits.worldbank.org/

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Gardner, Grant. “Soybeans Stage a Comeback: Chinese Demand and Biofuel Growth Lead the Way.” Southern Ag Today 5(45.3). November 5, 2025. Permalink

The USDA’s World Agricultural Supply and Demand Estimates (WASDE) report is one of the most influential monthly publications in agriculture. It summarizes and updates projections on global crop production, trade, and consumption—information that agricultural markets rely on to set prices. However, the October WASDE report will not be released due to the ongoing government shutdown. Without this update, the effects ripple across the supply chain, impacting farmers, merchandisers, and financial markets that depend on timely market intelligence to guide decisions.

Previous government shutdowns have interrupted the release of WASDE reports, and research has shown this has introduced heightened uncertainty into the markets during the short term (Adjemian et al. 2017; Goyal and Adjemian, 2021). Without the monthly WASDE, buyers and sellers lose a crucial reference point on where the market stands. While we can only speculate about what the October report would have shown, its absence means missed opportunities. The numbers could have shifted prices positively or negatively, creating advantages for either sellers or buyers of agricultural commodities.

The disruption is especially significant during harvest. This is the time when actual yields are measured, contracts are delivered, and elevators manage a surge of grain. Typically, the October and November WASDE reports capture updated harvest conditions, painting a near real-time picture of the national balance sheet. Without those updates, elevators are left to alternative sources of information to estimate supply levels—possibly causing basis moves that may be too high or low. Similarly, demand projections lack clarity, which can swing futures prices in either direction.

In the short term, private forecasts will likely gain influence, but these estimates often vary widely by source, adding to market volatility. In the longer term, multiple months of projections may be bundled into a single release once USDA reporting resumes, creating larger adjustments in supply or demand estimates that markets must digest all at once.

In sum, whether the October WASDE would have been bullish or bearish for producers would have depended largely on changes to yield estimates. But the absence of a report is significant in itself. The lack of transparent, standardized market information increases the risk of mispriced grain and market inefficiencies, leaving producers and elevators to make large-scale marketing and storage decisions under heightened uncertainty.

References

Adjemian, M. K., Johansson, R., McKenzie, A., & Thomsen, M. (2018). Was the missing 2013 WASDE missed?. Applied Economic Perspectives and Policy, 40(4), 653-671.

Goyal, R., & Adjemian, M. K. (2021). The 2019 government shutdown increased uncertainty in major agricultural commodity markets. Food Policy, 102, 102064.

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Gardner, Grant. “Potential Market Impacts of Missing a WASDE Report During Government Shutdowns.” Southern Ag Today 5(42.3). October 15, 2025. Permalink

Growing demand for renewable fuel is reshaping crop decisions across the Southern United States, where farmers are rapidly expanding winter canola production. Traditionally grown in the U.S. Northern Plains, canola is now gaining traction in Southern double-crop rotations—driven largely by a strategic partnership between Bunge, Chevron, and Corteva Agriscience. Interest in winter canola production has been focused on the potential for winter oilseeds to contribute to the U.S Sustainable Aviation Fuel (SAF) Grand Challenge goal of 3 billion gallons of SAF by 2030 and 35 billion gallons by 2050.

The partnership combines Bunge’s grain origination and processing, Chevron’s fuel distribution, and Corteva’s proprietary genetics to position winter canola as a leading feedstock for renewable fuel. Central to this strategy is a new oilseed processing facility in Destrehan, Louisiana, which is slated to begin processing canola by 2026.

To meet projected demand by 2026, the strategic partnership launched a pilot program in the 2023–24 marketing year, contracting 5,000 acres across western Kentucky and Tennessee. By 2024–25, the initiative expanded to over 35,000 acres spanning Kentucky, Tennessee, Mississippi, Arkansas, Alabama, and Missouri (Pioneer, 2024). Reported insured acres from USDA’s Risk Management Agency (RMA) confirm this growth (Figure 1), with average increases of nearly 500% across Alabama, Kentucky, and Tennessee—highlighted by 7,500 acres in Tennessee and 25,000 in Kentucky.

Based on the anticipated crush capacity at the Destrehan, LA facility, near-term canola demand could reach 100,000 to 150,000 acres across the Southern United States. Over the longer term, the partnering companies project demand could rise to nearly 1 million acres as infrastructure and markets scale (Heslip, 2024).

Early reports from Kentucky and Tennessee suggest winter canola average yields of 40–65 bushels per acre. Contract prices for 2024 (2025 crop year) hovered around $12.00 per bushel, depending on contract timing, acres contracted, and freight costs. Gross revenue of $480-$780 per acre provides many mid-south farmers with a viable financial alternative to traditional soft red winter wheat production (Gross revenue of $420-$468; University of Kentucky and University of Tennessee 2025 Crop Budgets). Many growers report lower input costs compared to winter wheat, contributing to higher profit margins at current price levels. Currently, acreage contracts are being offered to producers for fall planting. Acreage contracts provide producers with a defined number of acres at a specified price. Production is not specified in the contract; the contract writer takes all production for the contracted acres at the set price.  Before entering a production contract, producers need to fully understand the terms and conditions, including production practices, delivery, and quality specifications.

Figure 1: Canola Acres Insured (Net Reported) by State and Year

Sources:

Pioneer. 2024. “Corteva-Bunge-Chevron Winter Canola Program in the Mid-South Achieves Successful Harvest.” Accessed July 8, 2025. https://www.pioneer.com/us/news-and-events/news/media-release/corteva-bunge-chevron-winter-canola-successful-harvest.html.

Heslip, Nicole. 2024. “Winter Canola Pilot Expanding in Mid-South.” Brownfield Ag News (blog). Accessed July 8, 2025. https://www.brownfieldagnews.com/news/winter-canola-pilot-expanding-in-mid-south/.

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Gardner, Grant, and Aaron Smith. “Winter Canola Expansion in the Southern U.S: A Renewable Fuel Opportunity.” Southern Ag Today 5(29.3). July 16, 2025. Permalink

Searching for “Trump” and “grain market volatility” on Google will yield numerous results. While much of a grain marketer’s attention is paid to weather, production forecasts, seasonal trends, and supply and demand fundamentals, the “on-again, off-again” nature of tariffs under the current administration has added to an already volatile price environment. Instead of analyzing how tariff announcements have affected grain price volatility, this article takes an alternative approach, highlighting the major US grain-buying countries to better prepare producers for market impacts as tariffs are implemented.

The danger that tariffs pose to US agricultural commodity prices is typically linked to retaliatory tariffs or those enacted in response to US tariffs. On April 2nd, the Trump Administration announced “reciprocal tariffs” affecting nearly 90 nations. New tariffs have been added to the existing tariffs on Canada, Mexico, China, and the European Union. Tariffed countries now account for more than 77% of US corn exports, 76% of soybean exports, and 57% of wheat exports (averaged from 2020 to 2024, as shown in Figures 1, 2, and 3). While approximately 15% of US corn, 40% of US soybean, and 45% of US wheat production is exported, China accounts for 17% of corn, 53% of soybean, and 8% of wheat exports. China already announced retaliatory tariffs, which, in combination with the new Trump administration tariffs, coincided with a decline of over $0.50/bu in November 2025 soybean futures over the two days following the announcement. 

As retaliatory tariffs take effect, US agricultural commodities become more expensive, reducing exports and increasing ending stocks, which subsequently lowers prices. While nations may not completely halt their purchases of US crops, they are likely to redirect demand toward competing suppliers, such as Brazil, Argentina, and the Black Sea region, if net prices (commodity price + tariffs) are lower.

Regardless of political perspective, tariffs disrupt free trade and undermine comparative advantages and efficiency. For instance, the US has a comparative advantage over most countries in corn and soybean production. When retaliatory tariffs are imposed, the demand for efficiently produced US goods, such as corn and soybeans, decreases, pushing prices down. Conversely, retaliatory tariffs restrict access to efficiently produced goods from other countries, such as fertilizers, resulting in higher prices. Traditional market indicators, such as supply and demand and exchange rates, continue to influence prices. Meanwhile, tariff-induced volatility has likely been exacerbated by artificial intelligence, which can extract insights from written and spoken media while simultaneously executing trades. Although it is nearly impossible for producers to react at the same speed, the announcement of US tariffs or foreign retaliatory tariffs may signal a need for price risk management, as the effects of new tariffs are likely bearish in the short term. 

Figure 1: Average US Corn Exports by Destination (2020-2024)

Figure 2: Average US Soybean Exports by Destination (2020-2024)  

Figure 3: Average US Wheat Exports by Destination (2020-2024)

Gardner, Grant. “Major Players in US Trade and Grain Market Volatility.” Southern Ag Today 5(15.3). April 9, 2025. Permalink

The October 16, 2024, edition of Southern Ag Today indicated a slightly bullish wheat situation within the United States (Welch, 2024). Today’s article discusses this further using three charts: U.S. Wheat Imports by Country, Wheat Production by Country, and Ending Stocks by Country. Wheat is a global crop, with the U.S. accounting for just 7% of the world’s wheat supply (Welch, 2024). Thus, U.S. fundamentals may not be the best indicator of a bullish outlook. Generally, the U.S. has a few uses for wheat, including food, seed, feed, and exports. Year over year, we see similar quantities of wheat used for food, seed, and feed. Significant changes in demand, which could result in a bullish outlook, typically occur due to changes in exports. 

                  Figure 1 illustrates U.S. wheat imports by country. In general, Mexico is the largest importer of U.S. wheat. China is a vast producer – typically keeping most of its production for domestic use – but it is also a significant importer. In 2023, China imported more wheat than usual due to quality deterioration. This situation is unlikely to occur again in 2024, as China is projected to have above-average production (Figure 2) and standard quality. However, the U.S. could see a price increase due to smaller production and ending stocks in the European Union (Figures 2 and 3). The E.U. has had a bad year of production with low quality in crucial wheat producing countries, including Germany and France. Consequently, E.U. stocks are projected to be the lowest since 2000. French wheat, similar to U.S. soft red winter, is used for food products like cakes, cookies, and pastries, requiring lower-protein wheat. German wheat is similar to U.S. hard wheats, including hard red winter wheat, and it is often used for bread and pizza dough.  

                  The low stocks and production situation could cause the E.U. to limit their exports, opening opportunities for more U.S. exports to countries that typically buy wheat from the European Union.  It could also result in more direct U.S. exports into the E.U., boosting U.S. wheat price. A series of U.S. sales to the E.U. could indicate bullish action in the wheat market and be a crucial indicator to sell this marketing year. 

Figure 1: U.S. Wheat Imports by Country

Figure 2: Wheat Production by Country

Figure 3: Ending Stocks by Country

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Sources:

U.S. Department of Agriculture. (2024). Production, Supply, and Distribution database. Foreign Agricultural Service. https://www.fas.usda.gov/data/psd-online

Welch, J. Mark. “Recap of the October WASDE for Grains and Soybeans.” Southern Ag Today 4(42.3). October 16, 2024. Permalink

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Gardner, Grant, and Frayne Olson. “Global Wheat Shortfalls Could Signal Bullish Potential for U.S. Wheat.“ Southern Ag Today 4(44.3). October 30, 2024. Permalink