We are starting to hear more talk of acreage shifting from corn to soybeans due to wet fields and planting delays, mainly in the Eastern Corn Belt. The state most interest is focused on is Ohio, where nearly 1 million corn acres remained unplanted when the state reached its prevent plant insurance date. With a depressed corn market, many farmers are expected to opt for insurance payments rather than try to force a high-priced corn crop into the ground. Reports from Tennessee and Kentucky indicate the same conditions, as is a pocket of area in Southern Illinois and Indiana. Given these conditions, analysts are starting to not only doubt current acreage estimates but also the lofty U.S. corn yield estimate as well.

Soybean crush margins are starting to see market interest. The current crush margin on soybeans has been ranging from $1.30 to $1.40 per bushel for the past several weeks. Crush margins for the deferred months are much better, ranging from $1.75 to $1.85, and up to $1.90 per bushel. Optimism on future biodiesel production and demand are behind the elevated crush returns. Even if the government biodiesel blending target for 2026 comes in at 4.6 billion gallons instead of the 5.2 billion gallons that was hoped for, it will still be an increase from this year.

Chinese import data showed the country took in a record 13.9 million metric tons of soybeans in the month of May. This was a sharp reversal from the record low 6.1 mmt of soybeans China imported in April. Improved flow at China’s import terminals was the primary reason for the higher number. Year-to-date Chinese soybean imports now total 37.1 mmt, down 0.7 percent from last year’s pace.

China also imported 513,000 mt of meat in May, a steady volume from April. Year-to-date Chinese meat imports total 2.7 mmt, a 100,000 mt decline from last year’s pace.

Trade is becoming increasingly concerned with the lack of new crop export commitments from China. At the present time China has no U.S. corn, soybean, or wheat purchases for delivery. This really is not as surprising nor as negative as it appears. China is not a primary U.S. corn importer, even when they do make purchases. China’s slow acceptance of GMO corn has long kept U.S. trade to a minimum. China also tends to source the majority of its wheat from Russia and the Black Sea region. China is a primary U.S. soybean trade partner but typically does not start buying new crop U.S. soybeans until late summer. If we do not see Chinese business within the next few weeks, trade will start to become more nervous.

A factor that has slowed U.S. trade with all partners, outside of tariffs, is the volatility we are seeing in the U.S. dollar. Many import buyers are now showing more interest in extending coverage when the dollar weakens, not necessarily when futures break. The dollar has posted wide swings in recent weeks, and these have coincided with windows elevated demand. Elevated volatility in the dollar is also causing ebbs and flows with foreign selling, especially out of South America.

Brazilian farmer selling has started to increase. One reason for this is currency exchange rates and the rebound that we saw in the U.S. dollar, which does favor foreign selling. A bigger reason is grain storage is becoming tight in Brazil. Brazilian farmers just wrapped up the harvest of a record-sized soybean crop and logistic issues caused a slow start to the country’s export program.

Now many of the country’s storage facilities are full and need to be emptied as the safrinha harvest is getting underway. Expectations for a larger safrinha crop than initially thought will require even more storage. These Brazilian soybeans, and some of the country’s first corn crop, are now being pushed into the global market, slowing demand for U.S. offers.

China has started booking soybeans from Brazil for 2026 shipment. China booked a reported 18 vessels of soybeans from Brazil this past week, and 12 of these are for next year. China now has 3 mmt of Brazil soybeans booked for delivery for February, March and April of 2026. China has also booked a sizable volume of soy meal for this period. The ability to lock in favorable margins is a primary reason for this coverage, which is not uncommon as that is when Brazil typically starts their new crop export program.

Several meat industry groups from South America visited China recently. Argentina was one of these who signed an agreement with China to promote beef trade. Argentina is 21 percent of China’s import business, but China is 74 percent of Argentine exports. This makes it critical for Argentina to maintain Chinese relations.

Groups from Brazil have also visited China to try and expand beef trade. Data from the Sitonia group shows Brazil was 47 percent of China’s beef imports in 2024 despite trade differences. By comparison, the US has a 5 percent Chinese beef market share.

China’s total beef demand is down 10.5 percent this year from last as the country’s economy remains stagnant and diets have started to change.

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