The Agriculture Department cut its projections for U.S. soybean exports for the 2025-2026 fiscal year in its July World Agricultural Supply and Demand Estimates released Friday. Domestic crush is set to rise on new policies to promote biofuels and domestic feedstocks, but not by enough to offset export losses.
Soybean exports for this fiscal year are set to reach 1.75 billion bushels, down from the 1.82 billion USDA estimated in the June WASDE. The reduced exports can be partly attributed to rising domestic demand, USDA said, along with increased global competition from key competitors.
The Environmental Protection Agency last month proposed renewable volume obligations for renewable fuels above the levels industry had requested, catching some off guard. The announcement also included a proposal to reduce the availability of Renewable Identification Numbers for fuels produced from foreign feedstocks, boosting demand for domestic inputs.
Accounting for these adjustments, USDA said it expects to see an additional 50 million soybean bushels crushed in 2025-2026.
“Along with EPA’s proposed rule, the forecast considered additional policy incentives like the 45Z Clean Fuel Production Tax Credit and current state mandates,” July’s WASDE reads. “As a result, soybean oil used for biofuel for 2025/26 is raised 1.6 billion pounds to 15.5 billion, reflecting a 23 percent increase from the prior 3-year average.”
Soybean exports, however, are facing increased competition due to higher exports from Argentina, Ukraine and Brazil during the peak export season at the end of September.
Ultimately, the higher crush won’t be sufficient to fully offset the reduced exports, and USDA anticipates higher ending stocks of 310 million bushels – up 15 million from the June report.
In addition to heightened competition, U.S. soybean exporters could also be forced to grapple with a contraction in their biggest market, according to monthly analysis form North Dakota State University, also published Friday.
Chinese agricultural imports are down 18% so far this year from the same period last year. U.S. soybean exporters sent more than 50% of their exports to China last year and are among those that will feel the impacts more acutely, the researchers say.
While there are still several months until peak soybean export season, the authors point to a concerning trend.
“Soybean contracts are nearly nonexistent,” the authors write.
The U.S. and China had been locked in a tit-for-tat cycle of tariff hikes on each other’s exports earlier this year. But U.S. and Chinese officials negotiated a tariff truce during meetings in Geneva in May that led to both sides agreeing to ease some of the duties until early next month.
The NDSU researchers note that the truce led to some increased interest in signing export contracts for later this year. But “overall volumes remain below 2024 levels and well below three-year averages,” they write.
“This suggests a lack of confidence among Chinese buyers and continued uncertainty regarding future trade terms,” the authors write.
But Jacquie Holland, an economist at the American Soybean Association, still sees a bright side in Friday’s WASDE numbers.
Even though exports are set to fall, “the increased soybean oil consumption volumes from biomass-based diesel production are high enough to increase prices,” she told Agri-Pulse in an email.
The Renewable Volume Obligations, curbs on incentives for foreign biofuel feedstocks and 45Z adjustments “are highly supportive of domestic soybean consumption,” she added. “They will provide more price stability for soybean producers despite ongoing tariff uncertainty.”
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