Chinese Demand Fails to Support Soybean Rally as Markets Take Profits

Soybean prices continued their retreat into the weekend, with January futures finishing 16 3/4 cents lower at $10.76 3/4, reflecting broader weakness across the complex. The nearby cash market declined 17 cents to $10.06 1/2, while the week’s cumulative losses reached 28 cents on the front month contract—a significant pullback despite active demand signals from major importers.

Crushing Spreads and Meal Markets Show Divergence

The soy complex displayed mixed signals as participants adjusted positions ahead of the week’s close. Soybean meal futures posted notable gains in near-term contracts, climbing 40 cents to $1.80 higher in the front months, though deferred months retreated. January meal closed the week down $4.90, reflecting rotation out of near-term strength. Soy oil futures presented a steeper decline, falling 55 to 83 points across the curve, with January down 162 points since the start of the week—the sharpest losses within the complex.

Chinese Purchases Mount Despite Price Weakness

Despite softer price action, Chinese buying remained consistent. The USDA reported a private export sale of 132,000 metric tons to China on Friday morning, adding to the week’s tally. Accumulated Chinese purchases through daily and weekly flash sales now total 3.5 million metric tons, underscoring sustained demand from the world’s largest soybean importer. In parallel, soybean meal sales were recorded at 104,328 MT destined for Mexico, split between 93,895 MT for the current marketing year and 10,433 MT for the next cycle.

Trader Positioning Reaches Highest Levels Since 2020

The Commitment of Traders report, updated Friday afternoon for the week ending November 18, showed speculative funds adding 35,182 contracts to their net long position. The resulting 229,625 contract net long position marks the highest level since October 2020, indicating substantial bullish positioning despite the week’s price declines—a classic case of buying weakness.

Forward Outlook: Export Expectations and Chinese Restocking

Traders anticipate the backlogged Export Sales report on Monday will reveal soybean sales ranging from 0.8 to 3 million metric tons for the November 20 week. Meal sales are projected between 100,000 and 450,000 MT, while bean oil sales estimates span 5,000 to 25,000 MT. A significant wild card emerged with Sinograin, China’s state stockpiler, announcing an auction for 513,000 MT of imported soybeans scheduled for next Tuesday—a move potentially signaling official restocking initiatives that could reshape near-term price dynamics.

Contract Close-Out Summary

March 26 Soybeans closed at $10.86 3/4, down 16 cents, while May 26 Soybeans settled at $10.97, down 15 1/4 cents. The yield curve remains in contango, reflecting ample supply expectations despite robust demand indicators.