Soybean price analysis as investors cast doubt on China’s trade deal

CBOT soybean futures have reversed most of the gains from earlier in the week despite the surge in biofuel demand. A stronger US dollar and doubts over China’s trade deal are weighing on the agricultural asset. In the ensuing sessions, headlines surrounding the US-Iran peace talks will continue to influence soybean price movements as investors eye the US dollar and crude oil prices. 

Soybean prices waver despite rise in biofuel demand 

In addition to corn and sugarcane, soybean oil is a source of biofuels. In times of higher crude oil prices, as has been the case since the start of the US-Iran war in late February, the demand for biofuels surge and bolsters soybean price.

In recent weeks, Brent oil has remained within the triple-digit zone amid concerns over the resurgence of the US-Iran war. On the one hand, President Trump has indicated that peace talks between Tehran and Washington are in their “final stages”. Besides, earlier in the week, he called off the planned military strikes on Iran to pave way for the Pakistan-led diplomacy efforts. 

These decisions have eased Brent oil from the two-week high hit at the start of the week at $112.70 a barrel to $104.78 at the time of writing. However, persistent uncertainties and disruptions along the all-important Strait of Hormuz continue to elevate crude oil and biofuel prices. 

Analysts expect Brent oil to continue trading near $100 a barrel for the rest of the year. This will inturn maintain biofuel demand higher for longer. Indeed, these forecasts informed USDA’s outlook in the May WASDE report. According to the agency, the 2026/27 marketing year that begins in September is expected to have stronger use and tighter supplies.

Even with this bullish driver, lthe ack of confirmation on China’s purchases are weighing on soybean prices. After Trump’s recent visit to Beijing, the US administration asserted that China is committed to purchase US agricultural produce worth $17 billion annually till 2028. However, China’s Ministry of Commerce indicated that the two countries discussed “a guiding target” without confirming the mentioned figures. 

Additionally, a stronger US dollar has rendered soybeans more expensive for buyers holding foreign currencies. On Thursday, the dollar index rose to its highest level since early April before pulling back. Uncertainties stemming from the US-Iran war have increased the safe-haven demand.  

Soybean price technical analysis

Soybeans price chart | Source: TradingView

CBOT soybean futures are on track to record the second week of losses after a three-day losing streak. A week ago, it dropped to a three-week low, momentarily trading below the medium-term 50-day EMA for the first time in five weeks. This is after retesting the two-year high hit earlier in the year.

While it has since recouped some of those losses, it lacks enough momentum to sustain the rebound. A look at its daily chart points to increased volatility within a defined trading range.

At the time of writing, CBOT soybean price was at $11.94 per bushel. At that level, the bulls are striving to defend the support at $11.91. A decline past that zone will likely activate the lower support along the 50-day EMA at $11.82. On the upside, the resistance levels of $12.14 and $12.19 are worth watching.