By Joe Janzen
The USDA recently released its first official World Agricultural Supply and Demand Estimates (WASDE) for the 2026/27 soybean marketing year on May 12. The report was neutral to slightly bullish for the soybean market. Projected 2026/27 US ending stocks for soybeans were 310 million bushels, or 40 million bushels below analysts’ pre-report estimates, mainly due to increases in projected domestic US soybean crushing outpacing declines in projected soybean exports. The new-crop November 2026 futures price gaining roughly 10 cents per bushel or 2.3% on the day of the report release.
These relatively modest changes in the soybean market quantities and prices obscure a larger structural change in the composition of soybean demand. This shift was revealed more clearly in the US soybean oil balance sheet projections also released in the May WASDE. USDA projected US soybean oil exports for 2026/27 at just 400 million pounds, the second lowest quantity on record since at least the 1964/65 marketing year. Despite crushing more soybeans in the US than ever, the resulting soybean oil will almost entirely be consumed domestically with biomass-based diesel production making up the largest share of use.
Rising demand for soybean oil as a biofuels feedstock is not news to anyone involved in the soybean market. However, the implications of this change for soybean price dynamics going forward remain subject to debate. As a general rule, agricultural commodity export demand is thought to be more price-responsive (or ‘elastic’) than US domestic demand. When production fluctuates, export markets often make the largest adjustments, buffering the price impacts of supply shocks both to the upside and downside. Driving soybean oil exports to near-zero and consuming that oil in the US implies a less elastic demand base and larger price changes in response to shifts in US soybean supply. Price volatility will be greater, especially if policy and other mechanisms cut ties between the US soybean oil market and global vegetable oil markets.
Soybean Balance Sheet Projections
New-crop 2026/27 marketing year US soybean supply and demand estimates are shown in Table 1. For context, data for the two previous marketing years are also shown along with the preliminary 2026/27 balance sheet that USDA presented at its Agricultural Outlook Forum in February. Relative to the February numbers, the May WASDE new-crop balance sheet contains planted acreage estimates released by USDA at the end of March and updated old-crop usage estimates that have lowered 2025/26 carry out estimates slightly. The supply side of the balance sheet contained no surprises; yield is pegged at long-run trend level which coincidentally results in no change in 2026 from the 2025 number and total supply of 4.8 billion bushels is very similar to the estimated level from February.
Source : illinois.edu