Soybean Meal Pressure Intensifies as Market Faces Multi-Factor Headwinds

Bean prices are experiencing substantial weakness this trading session, with declines ranging from 9 to 11 cents across the board. The national cash quote has slipped 11 cents to settle at $9.66 1/2, reflecting broader selling sentiment in the complex. Meal contracts are particularly heavy, retreating $36 to $6.80 and serving as the primary drag on sentiment, while oil futures offer limited support with gains of 90 to 97 points.

Supply Dynamics Creating Market Friction

Recent export confirmation shows USDA reported a private sale of 168,000 MT destined for China, with an additional 152,404 MT allocated to Mexico. These transactions provide some demand backdrop, though they haven’t arrested the downside momentum. Meanwhile, Sinograin’s auction of state reserves moved 1.1 MMT on Tuesday, adding to supply considerations in the market.

On the technical front, 26 delivery notices were issued Friday evening, while January bean oil saw 30 notices, suggesting active contract liquidation. Current contract levels show January futures at $10.23 3/4 (down 9 1/4 cents), March at $10.38 1/4 (off 10 3/4 cents), and May at $10.51 3/4 (declining 10 cents).

Production and Inventory Reshaping Outlooks

NASS crop data from Monday kept yield expectations steady at 53 bushels per acre but confirmed harvested acreage at 80.4 million acres, with total production reaching 4.262 billion bushels. December 1 stockpile data revealed 3.29 billion bushels in storage, representing a 190 million bushel increase versus year-ago levels.

The USDA’s latest WASDE adjustments account for these supply figures. Export projections were lowered by 60 million bushels to 1.575 billion bushels, crush estimates increased 15 million bushels to 2.57 billion bushels, and U.S. ending stocks were revised 60 million bushels higher to 350 million bushels. Internationally, Brazil’s production was raised 3 million metric tons to 178 MMT, adding to global supply calculations.

Geopolitical Elements Influencing Risk Assessment

Late Monday, trade policy developments introduced fresh volatility, with tariff threats on countries conducting business with Iran potentially impacting Chinese demand dynamics. While Beijing has yet to issue formal commentary, the uncertainty weighs on near-term sentiment and could influence meal demand trajectories moving forward.