By Ulf Bergman
After hitting multi-year highs in September, US soybean futures have trended lower over the past month, returning to levels last seen in the middle of August. The recent decline has been largely fuelled by rising global supplies, which have offset robust demand. The slide may not be fully complete yet, as the world’s leading producers are set for record crops in the 2026/27 season. While the market may remain under pressure, as is often the case, headwinds for commodity prices do not necessarily signal a bearish outlook for dry bulk freight rates, as volumes rather than values decide freight demand.
US and Brazil Are Set for Record Crops
According to the latest estimates from the USDA, the US soybean harvest is expected to reach a record 4.56 billion bushels. The latest reading was 27 million bushels higher than the preceding estimate, reflecting a higher yield, and, with the harvest nearly 80 per cent complete by late October, the final figure is unlikely to deviate much from it. Weekly export inspections have also risen sharply, to nearly 2.5 million tonnes during each of the past two weeks, highlighting the strength of global demand. The USDA also raised its export forecast by 10 million bushels to nearly 1.7 billion bushels.
US soybean futures reached a multi-year high in mid-September amid robust demand and concerns over supplies. However, since then, an increasingly upbeat outlook for the US harvest has weighed on prices, with January CBOT futures shedding around ten per cent.
Brazil’s National Supply Company (Conab) published its latest outlook for the coming Brazilian soybean harvest in mid-October. The estimates suggest that production could reach 181.6 million tonnes during the 2026/27 marketing year, 0.7 per cent more than during the preceding twelve-month period. Conab also expects soybean exports to rise by 1.5 per cent to 118.0 million tonnes. President Lula’s recent re-election has weighed on the Brazilian currency. A weaker real lowers the dollar cost of Brazilian soybeans and encourages farmers to sell more of their inventories, which could lead international buyers to prioritise purchases from Brazil at the expense of the US.
Soybean Exports on the Rise
The global seaborne trade in soybeans has been strong so far this year. According to the latest data from Signal Ocean, 154.2 million tonnes were exported during the first ten months of the year. The figure was 7.3 per cent higher than in 2025 and accelerated from the previous two years’ growth rates for the same period, which were around five per cent. Last month, global exports grew by 10.0 per cent year-on-year to 15.8 million tonnes, reversing two years of lower October volumes, although the total remained below 2023 and 2024.
While exports from the world’s two leading producers, Brazil and the US, are both up year-to-date, the underlying data look quite different. For Brazil, the trade has continued to boom, benefiting from Chinese buyers’ shift towards Brazilian origins since the 2025 trade dispute. In contrast, the data for the US suggest that the growth is more of a recovery story.
Brazilian exports have grown year-on-year in every month so far this year except February. While absolute volumes have been trending downwards since the peak in April, in line with normal seasonal behaviour, monthly aggregates have been between two and 24 per cent higher in the other months. The strength of Brazilian exports allowed the country to outship the US in October, normally the peak month for US exports. After a sharp dip in 2025, this year’s recovery has not fully restored US volumes to previous levels. Nevertheless, the US saw its soybean exports rise by 31.9 per cent during the year’s first ten months, with October seeing a solid 69.3 per cent increase compared with the same month last year.
The solid growth in exports benefited all the main segments serving the seaborne soybean trade, albeit to different extents. According to Signal Ocean’s data, the supra/ultramax segment recorded a 49 per cent increase year-on-year in October, contributing to a 24 per cent rise in year-to-date volumes. In contrast, panamax volumes grew nearly nine per cent, contributing modestly to year-to-date growth of just over three per cent. Despite the smaller segment’s outperformance, panamaxes remain the primary workhorses, carrying more than four times the volumes shipped on the smaller vessels year-to-date.
Beyond the global growth, a closer look at the data for the main exporters reveals a more nuanced picture. Supramaxes have seen volumes grow from both Brazil and the US. However, the demand growth has been significantly higher for Brazilian exports than for shipments leaving US ports. The discrepancy was especially notable last month, when Brazilian volumes jumped by 180 per cent and beat a healthy US growth of 28 per cent. For the panamaxes, developments have been rather different. Growth in Brazilian soybean exports on board panamaxes year-to-date has been modest at 2.6 per cent, with volumes down 7.4 per cent year-on-year last month. For the US, panamax demand from soybean shippers nearly tripled in October versus the same month last year, adding to year-to-date growth of 56 per cent.
The Outlook for the Seaborne Soybean Trade
On the back of October’s strong soybean export shipping data, it is tempting to assume more robustness will follow in the coming months. However, a few different factors, both positive and negative for volumes, need to be considered.
Seasonality is likely to play a role, as November, December and January are usually quite weak for global soybean volumes. Still, a sizeable US harvest and recent strong export inspection data suggest that any seasonal weakness may be moderated. In addition, recent efforts by the US administration to get China to honour its commitments from last year’s agreement on imports of US agricultural products may pay dividends and boost seaborne export volumes, further offsetting any negative seasonal effects.
While Brazilian export volumes will only start to recover in earnest in February, the current weakness of the real may boost overseas demand in the short term and further moderate the seasonal effects. Conab’s forecast of record production and higher exports in the coming year suggests that the rebound early next year will be robust and fuel demand for dry bulk tonnage.
Hence, in an environment of solid soybean supplies, prices are likely to remain suppressed, but robust exports will provide support for freight rates in the supramax and panamax segments.
Data source: Ocean Analytics