CBOT Soybeans Face Bearish Crosswinds as Trade Tensions and Soyoil Declines Weigh

The CBOT soybean market is under pressure, with futures prices slipping to $10.41-1/4 per bushel as of May 2025, driven by a toxic mix of trade tensions, weakening soyoil demand, and oversupply concerns. Analysts warn that without a resolution to U.S.-China trade disputes or a sudden surge in demand, prices could test historic lows.

Trade Tensions Fuel Export Uncertainty

The U.S.-China trade war remains the dominant headwind. China, once the top buyer of American soybeans, has slashed purchases since imposing a 10% tariff (now at 20%) on U.S. soybeans in March . The result? U.S. exports to China have dropped by 74% compared to pre-trade-war levels—a pattern mirroring the 2018 crisis, when prices fell 20% within months.

The U.S. now faces stiff competition from Brazil, which is leveraging lower prices and record harvests to capture market share. China’s stockpile of unsold U.S. soybeans has swelled to 1.22 million tons, signaling a sustained shift toward non-U.S. suppliers. Meanwhile, U.S. tariffs on Canadian and Mexican agricultural goods, though temporarily suspended, leave global trade flows in disarray.

Technical Analysis: Bearish Momentum Dominates

Technical traders see little hope for a near-term rebound. Soybean futures are hovering near critical support levels, with the $10.25 zone acting as a magnet for sellers. A breakdown below this level could trigger a freefall toward $9.47—and possibly as low as $7.00 by 2026, as long-term supply imbalances and potential drought risks loom.

The ** Elliot wave model suggests resistance near $10.70–$10.80, but bearish momentum remains intact. Even a short-term rebound (e.g., a double-bottom pattern at $10.70) would likely be fleeting, as commercial traders have piled into short positions. The CFTC’s latest report reveals managed money shorts up 12%**, while commercial traders—often dubbed “smart money”—have aggressively increased bearish bets.

Trader Strategies: Shorts and Micro Contracts

Traders are leaning on micro soybean futures (MZS) to navigate volatility. For example, a short trade at $10.23 with a stop-loss at $11.00 could yield gains of $615 per contract if prices drop to $9.00, with losses capped at $385. Analysts like JimHuangChicago advise shorting MZS ahead of key reports, such as the USDA’s WASDE on April 10th, where rising global supplies and tariff-driven demand erosion are expected to dominate.

Soyoil’s Slide and Biofuel Policies

Declines in soyoil futures are exacerbating the bearish tone. Soyoil prices are pressured by reduced EPA biofuel mandates and budget cuts, which lower demand for soy-derived biodiesel. This drag on the soy complex has become a self-fulfilling prophecy: weaker soyoil prices depress soybean values.

Contrarian Hopes Fade

A minority of analysts cite potential seasonal strength in April-May, pointing to historical rallies and support near the $10.17–$10.25 zone (near the 200-day moving average). But these bullish signals are swamped by overwhelming bearish fundamentals.

Conclusion: The Bear Case Is Strong

The CBOT soybean market’s trajectory is unmistakably downward. With trade tensions unresolved, Brazilian competition intensifying, and soyoil-driven headwinds, prices face a high risk of hitting $8.00—and possibly $7.00—in the coming months. The 2018 trade war serves as a grim precedent: U.S. soy exports to China fell 51%, and prices plummeted 20%.

Traders should prioritize short positions, use micro contracts to manage risk, and stay glued to tariff developments and USDA reports. Unless a geopolitical breakthrough or a sudden demand surge emerges, soybeans are in for a prolonged slump.

Data sources: USDA export reports, CFTC Commitments of Traders, CBOT futures data.