The U.S. supply and demand numbers for soybeans are starting to get interesting. Many private firms have lowered their soybean crop estimates, with total production coming in closer to 4.2 billion bu. While still a large crop, the USDA is currently indicating a crop of 4.3 bbu, and new crop demand is at 4.351 bbu. What is more notable is this year’s soybean carryout is already a tight 300 million bu.

If the U.S. is closer to private estimates, significant rationing will be needed. Right now, only residual usage can realistically be trimmed, and that is a total of 111 mbu. Even export demand outside of China is ahead of average, making the loss of China trade less concerning. The real worry will be if China does start buying soybeans, competing with domestic usage.

The Brazilian planting season is off to a rapid start this year. Dry soils are allowing for a quick planting pace in Brazil, but the need of new crop corn and soybeans is also a likely factor. China has upped its demand for South American corn and soybeans since the start of the trade war with the U.S., and this has cut into those countries’ reserves. This came as Brazil has expanded its domestic biofuel capacity, and elevated demand for its own production. As a result, even with expanded plantings this year, additional exports may be limited.

Now that the South American planting season is underway, more attention is falling on weather forecasts in that region of the globe. The Brazilian planting season started out quick on the first corn crop, but soybean planting has been sluggish to advance. Needed rains have failed to develop and farmers are waiting before planting, same as they did last year. Forecasts indicate wetter conditions next week, so any disruption may be limited. This progress is being closely monitored by China as it may extend the window it needs to make imports for, forcing them to buy from the U.S.

We are also seeing weather concerns build in China, but from excessive rains, not drought. Parts of China have received flooding rains in recent weeks and are now concerned this may impact crop quality. Right now, the greatest concern is mold in standing corn fields. China is reporting better growing conditions for its soybean crop and believe the crop could be larger than currently estimated.

The U.S. attaché in China has revised that country’s soybean production estimate, putting the crop at 19.9 million mt. This is just slightly higher than the groups’ prior estimate as weather conditions in China have been favorable for soybean production. The attaché held its soybean import forecast steady at 106 mmt this year, 1 mmt less than in the 2024/25 marketing year. China has been cutting the volume of meal it is using in feed rations at the same time the country starts culling its hog herd, reducing feed demand on a whole.

China has updated its 2025/26 grain production forecasts. China is predicting a corn crop of 298 million metric tons, up 3 mmt from last year’s crop. China is only expecting corn imports of 7 mmt this year, well below the 23 mmt the country imported in the 2023/24 marketing year. Consolidation in China’s livestock industry is a primary reason for the decline in corn imports, as are improved feeding efficiencies. China held its wheat crop at 140 mmt but raised its imports to 6 mmt, up 1.8 mmt from its last projection.

While the U.S. beef supply is at historically low levels, the market is receiving signs this may start to build. For one, packers are starting to pass along higher costs as their margins have dropped into negative territory. This is coming from the collapse in boxed beef on lower consumer demand.

The United States is also seeing its share on the Chinese beef market drop as tariffs and the expiration of import certificates have greatly impacted demand. Prior to these two events, the U.S. was exporting China a reported $120 million pounds of beef per month but much of this demand has been replaced with Australian beef. Fortunately, until the U.S. beef inventory gets back to a normal level this loss of demand will have a muted market impact.

The greatest impact on feeder cattle imports is the approval of a vaccine for New World Screwworm. This will speed up the reopening of the border for Mexican feeder cattle imports, which averaged 100,000 head per month prior to the outbreak of that highly contagious disease in Mexican livestock.

We are starting to see U.S. meat packers take extended periods of downtime for much needed maintenance. Many packers have neglected maintenance in recent years as margins were very strong, and they wanted to capture as much as possible. Margins have recently turned negative as the whole sale market is softening while cattle values remain elevated, supported by tight inventories. U.S. supplies of beef and pork remain low, but uncertain demand due to the U.S. economy and export tariffs are becoming more concerning. Given the fact many U.S. packing plants were already running at minimum chain capacity and closures are forecast to be short lived, market reaction may be muted.

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