US soybean markets have plenty to digest heading into the final months of 2026. A larger crop is coming off the field, but renewed Chinese buying and strong demand from soybean byproducts are providing outlets for those supplies. Beyond the current crop, disruptions to global fertilizer trade already are raising questions about production costs and planting decisions in 2027.
The USDA in September raised its 2026-27 soybean production forecast to 4.535 billion bushels, up from 4.262 billion bushels the year before, on an estimated 52.8-bushel-per-acre yield. Still, Sept. 1 soybean stocks totaled just 315 million bushels, down from 325 million bushels a year earlier and below the 324-million-bushel average pre-report trade estimate.
Harvest was 25% complete as of Oct. 4, behind the five-year average of 33% as wet weather slowed fieldwork in parts of the Midwest and temporarily tightened supplies available to crushers. The squeeze became particularly pronounced in the western Midwest, where some processors scaled back operations and cash bids for immediate deliveries, which rose as high as $1 per bushel over November futures.
Competition for nearby beans had been intensifying as domestic processors consume a larger share of US soybean supplies, supported by biofuel demand after the Environmental Protection Agency raised Renewable Fuel Standard (RFS) targets to record levels for 2026 and 2027. Yet a glut of imported feedstocks and finished biofuel in recent months has tempered demand and locked soybean oil futures into a tight, rangebound trading pattern.
“The soybean oil market is finding a well-defined parameter,” said Brian Harris, executive director and owner of Global Risk Management. “Every time we get between 71¢ and 72¢ (per pound), the market shuts down, and the same thing is true when the price drops between 65¢ and 67¢ (per pound). The end user wants to own it at that level because he knows that whatever happens with the administration, the RFS program is not going away.”
Joe Glauber, senior research fellow at the International Food Policy Research Institute and former USDA chief economist, said increased domestic processing has provided an important outlet as whole-bean exports have softened.
“One of the reasons why our soybean exports have dropped a little bit is we’ve been crushing more, and that’s due largely to domestic biofuel policies,” Glauber said. “We’ve seen this big growth in biodiesel over the last five years. That has helped mitigate what would have been some pretty big losses to US producers.”
The USDA forecast soybean oil use for biofuels at 17.8 billion pounds in 2026-27, up 3 billion pounds from the revised 2025-26 usage. Stronger oil demand was expected to help push soybean crush to a record 2.78 billion bushels, up from 2.66 billion bushels last year. The added processing, however, shifts rather than eliminates the need for export markets. More crush means more soybean meal must be sold.
“You have to find a home for soymeal,” Glauber said. “Figure out who that customer is. Right now, it’s unclear. We’ve shipped some south to Mexico. There’s been some interest in getting more into the European Union and places that are big consumers of protein meal.”
Whole beans face a different export challenge. China has returned as a significant buyer after being largely absent from the US market a year ago, but the current period traditionally should be the strongest window for US sales.
“You get to August, and South American supplies start to dwindle,” Glauber said. “That’s when China has traditionally turned to the US to be the supplier. From September to January and February, the US is normally the big supplier, so we should be competitive at this time of year. We should be selling a lot. They should be buying a lot.”
That seasonal advantage is being blunted by tariffs. The Sept. 24 meeting between US President Donald Trump and Chinese President Xi Jinping left an additional 10% tariff on US soybeans intact, making US supplies less attractive to private Chinese crushers. CBOT soybean futures fell 1.38% to $13.07¾ a bushel on Sept. 28 as the market reacted to soybeans being excluded from proposed Chinese tariff reductions.
Chinese state buyers have continued to purchase US beans, but private crushers largely are covered through the Lunar New Year (Feb. 6, 2027) by Brazilian, Argentine and state-reserve supplies. Negative crush margins and 15-year-high soybean inventories have limited additional buying.
While crush and exports will determine how quickly the current crop is absorbed, Strait of Hormuz shipping disruptions have tightened fertilizer and energy supplies, raising costs for next season’s crop.
Those costs may influence next spring’s acreage mix. Soybeans require considerably less nitrogen fertilizer than corn, potentially improving their relative economics if fertilizer prices stay high. Glauber said elevated input costs were one reason soybeans still looked competitive with crops requiring heavier fertilizer applications.
For soybeans, therefore, the outlook heading into 2027 hinges on how those forces intersect: whether domestic processing can sustain its growth, whether China provides a reliable outlet for US supplies and whether fertilizer markets ease before growers make their next planting decisions.
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Competing forces in wheat
The late September USDA report highlighting wheat production and current stocks sharpened the picture for US wheat supplies, adding fundamental considerations to a market already balancing plentiful inventories against class-specific supply concerns and export demand. Those crosscurrents helped keep the outlook more nuanced than the overall supply numbers alone suggested.
The USDA’s Sept. 30 Small Grains Summary estimated the 2026 US wheat crop at 1.534 billion bushels, down 23% from 2025, as harvested area fell 15% to 31.9 million acres and the average yield dropped 5.2 bushels to 48.1 bushels per acre. Hard red winter wheat production plunged 42% to 466.4 million bushels, while hard red spring wheat production fell 9% to 416.3 million bushels. Soft red winter wheat production was down 17% at 293.8 million bushels.
At the same time, Sept. 1 wheat stocks totaled 1.846 billion bushels, 14% below a year earlier. Stocks in Kansas fell sharply, to 312.8 million bushels, down from 417.4 million bushels a year earlier. That geographic distribution matters as much as the aggregate supply figure, said Arlan Suderman, chief commodities economist at StoneX.
“A lot of it is in states that don’t have direct access to the export market, or as easy of direct access to the export market versus Kansas, where much of the structure for export is,” Suderman explained. “We’re seeing significant declines in stocks in Kansas. I think the spreads are reflecting that.”
The Small Grains report also brought a surprise in the relationship between wheat classes, Suderman said, with the spring wheat crop smaller than anticipated and winter wheat larger. That shifted attention toward supplies of milling-quality wheat and helped explain the unusual relationships between Kansas City and Minneapolis futures.
“What matters now is quality milling wheat until we get a better handle on what overall supplies are going to be on the global export market for quality milling wheat,” Suderman said.
Prevailing rains that delayed harvest in portions of the southern Canadian Prairies also added uncertainty about crop quality.
“It’s not just about overall supplies, but it’s also about logistics and where it’s at and the ability to get it there,” he said.
Attention already was turning to the next domestic crop. The USDA said winter wheat seeding was 36% complete as of Oct. 4, about 10 percentage points behind the five-year average, while emergence was 16%, four points behind average. Drought remained widespread despite beneficial Plains rains in late September. The USDA estimated 57% of US winter wheat area was in some stage of drought as of Sept. 29, compared with 45% a year earlier.
Suderman sees potential for a sizable increase in winter wheat acreage. Revenue insurance guarantees established during the fall calculation period were favorable enough to encourage planting, he said, while recent rain improved prospects across portions of the previously dry Plains.
“When you look at the price guarantees that we got during the calculation period this fall, it would suggest that we should see some significant acreage increases,” Suderman said. “There’s an old saying in the Plains: If it rains, you plant a crop. Depending on the time of year, it tells you what crop you’re planting. In this case, it would say we should see a lot of winter wheat acres planted.”
Globally, large wheat supplies also may overstate the amount practically available to world buyers. The USDA in September projected 2026-27 world wheat ending stocks at 276.3 million tonnes, after raising production estimates for several exporters. But Suderman believes the USDA has yet to fully account for disrupted Black Sea logistics and said Russian and Ukrainian exports ultimately might be reduced by another 20 million to 25 million tonnes.
For now, cheaper origins continue to undercut US wheat, particularly with a strengthening dollar. Suderman expects buyers to exhaust those alternatives before turning more aggressively toward the United States.
“That’s the job of the marketplace, to ration supply and demand,” he said. “Finally, it ends up with pulling from those areas that are most expensive, which should be the United States, frankly.”
If Black Sea disruptions persist, Suderman expects that dynamic to become more supportive in the first half of 2027 as importers diversify suppliers. But wheat also faces a headwind from corn after the USDA reported Sept. 1 corn stocks of 2.095 billion bushels, up 35% from a year earlier.
For flour buyers, location along with quality and transportation components may prove nearly as important as outright futures values. Suderman said risks might escalate in the first and second quarters of 2027, particularly if Black Sea headlines attract speculative fund buying.
“It’s one thing to hedge the price on the futures market, but the supplies of where you’re located and how limited are they (should be considered),” he said. “How far are you going to have to go to get what you want and to get the right mix of the type of wheat that you want, I think, is also going to be a factor we’ll have to pay attention to.”
While the narrative surrounding each crop differs, the markets share a similar underlying theme heading into 2027. Large supplies continue to cap rallies, but uncertainties surrounding global trade flows, weather developments and geopolitical tensions leave the door open for renewed volatility.
The outlook for 2027 ultimately may depend less on the crops already in storage and more on what happens next. From South American weather and Black Sea trade disruptions to fertilizer costs and trade negotiations with China and North American partners, a host of unresolved issues have the potential to reshape supply-and-demand expectations across the grain complex. Market participants expect volatility to remain a defining feature of agricultural markets in the months ahead.
