In the USDA's report on World Agricultural Supply and Demand Estimates published last Friday, next US soybean production is forecast at 117.05Mmt, compared to 116.81 last month with a soybean yield of 53.5 bushels per acre, compared to 53.6 last month and a 53.3 trade estimate. Exports (45.86Mmt) were reduced by 20 million bushels and domestic crush increased by 15 million bushels. For the 2025-26 marketing year, ending stocks were estimated at 300M bushels (8.16Mmt), compared to 290M last month.

But due to serious export concerns, beans remain in “bear market mode”. Determined to avoid buying American soybeans, China has been stockpiling beans from South America and a sharp decline in US soybean exports, pushing up ending stocks, could drive the price of US beans further down and push South American soybean prices further up.

In global markets, places of supply are always matched to places of demand -at a price. Who can rule out Argentinian imports after selling their beans to China? or weather problems during the next growing season in South America? or a return of China to the US? No one knows what will happen, but whatever happens trade flows will adapt.

Soybean futures got support on Friday following news of progress in trade talks with China although China has already secured its needs in South America for September and October. If a trade agreement is reached, China could be in the market for November deliveries at the earliest. For the first in years, the US harvest starts with an empty “China sales book”. Last season the US exported about 23Mmt to China, most of which was shipped between September and January, ahead of the Brazilian harvest. As harvest picks up it could still influence soybean price development as disease pressure and dry weather to finish to the growing season could still hurt production.

Soybean oil in the US is supported by the domestic biodiesel policy and the fact that the US don’t produce enough oils & fats for their total food and nonfood consumption. The US is a net importer of edible oils. Domestic prices of animal fat, corn oil and used cooking oil/yellow grease increased significantly as demand is outpacing supply. If foreign feedstocks don’t get the incentives (subsidy/tax cut to be profitable) to use in US biodiesel more soybean oil will be used for biodiesel and imported oils will be needed to satisfy demand for food, feed and oleochemicals. Theoretically (depending on tariffs) Argentine or even EU soybean oil could be imported to satisfy US food demand. But also, Canadian rapeseed oil. Hard to predict how that will turn out and what it will do on price. At the same time biodiesel activity in the US has been subdued, something which is also making a lot of folks nervous.

In EU, soybean crushers are facing low crush margins and, where possible, are turning to alternatives such as rapeseed, which is slightly reducing the supply of soybean meal and oil.

On the biodiesel front in the US, everything is still possible. The US biodiesel policy is the subject of much debate, but nothing is certain until Washington makes definitive long-term decisions, expected to be released before the deadline of October 30th when the Renewable Volume Obligation guidelines for 2026 and 2027 must be finalized.

There is now discussion between the petroleum industry and farmers about the allocation of the SRE (small petroleum refinery exemption) and the petroleum refiners want to allow incentives for foreign feedstocks “as most of the investments they have made for renewable diesel production were designed for imported feedstock types (= Used Cooking Oil and tallow).” And let China be a big supplier of UCO….

Time will tell.

Rapeseed oil

The size of the 2025 EU harvest continues to weigh on prices, as demand remains subdued; although disappointing sunflower harvests offer some support. Ukraine has also confirmed the implementation of a 10% export tax on rapeseed this year in an effort to protect its domestic market, and Ukrainian exports are currently being somewhat hampered by administrative restrictions and the export taxes. EU prices benefited from the confusion surrounding the tax's implementation, but overall, this should be less than expected due to the numerous exemptions. So weak domestic demand and recently depressed petroleum prices are keeping a lid on the pot in a particularly hesitant oilseed complex.

In EU and Canada, harvest estimates have been revised upwards while Abares also raised its Australian harvest forecast to 6.4Mmt, in line with last year's figures. This should enable the country to secure generous export volumes to China, to replace Canadian seeds, which are now subject to prohibitive import duties.

According to StatsCan, the carry-out-stocks for the 2024/25 season fell to a three-year low of just 1.6Mmt, compared to 3.2 at the end of 2023/24. Canada is working and hoping on improved trade relations with China after China reportedly decided to postpone the conclusion of its anti-dumping investigation for several months. At the same time, Australia has reportedly already allocated a significant chunk of its next harvest to China. But the USDA thinks otherwise and says: “Australia is in discussions with China to develop a phytosanitary framework after being shut out of the market since 2020 due to detections of blackleg disease. Access could be restored after a protocol is reached and successful trial shipments are implemented.”

China now applies prohibitive tariffs on all Canadian rapeseed products. But China depends on imports, as rapeseed meal is needed for its aquaculture industry to partly replace the more expensive fishmeal. China's domestic production is insufficient to meet demand. Canada supplied most of China's rapeseed meal until May 2025. Now China is looking for suitable suppliers…. India can partly take over but today has not enough to satisfy demand.

In EU the price of rapeseed meal dopped sharply in recent weeks. The high supply and low demand are putting pressure on the market. China also put a 62% anti-dumping duty on EU pork which will lead to significant less export and probably less meal/compound feed demand. This could lead to higher oil prices.

Sunflower seed oil

In August, global sunflower seed oil prices rose, mainly supported by seasonally weaker supply in the Black Sea region ahead of the new harvest. In addition, weak seed sales by farmers, due to unfavorable weather conditions in some parts of Ukraine, supported prices. Also, the EU harvest is disappointing and the EU-27 crop is now expected just a bit above last year’s drought reduced crop. In contrast Russia and Kazakhstan look much better than last year which may somewhat compensate losses elsewhere.

Sunflower oil sellers are not very inclined to sell at discounted prices for the new crop. The harvest just started and bad news is pouring in, prompting the market to seek more accurate information on yields as the harvest progresses.

Sun oil remains (too?) expensive vs. other oils and prices for the fourth quarter remain firm, while for next year, sellers seem more willing to sell, without being too aggressive. In this regard, before the end of the year, we will see the “oliebollen” season and the end-of-year festivities. Then follow January and February which can be rather sluggish retail months, as people, with empty wallets, who have to save for Saint Valentine's Day, after having overeaten before and then on a diet, still carry old year stocks in their kitchens. You can try, but you can't party every day.

Butter

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