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Short Summary
As grain markets face pressure from ample supplies and muted demand, oilseeds, led by soybeans, are set for a stronger run in 2026. Structural changes in global biofuel policies, tightening supply-demand dynamics, and shifting trade strategies are positioning soybeans to outperform other major agricultural commodities.
Soybeans Gain an Edge as Grains Struggle
The outlook for grains and soft commodities in 2026 remains mixed, with limited upside expected for wheat and corn. In contrast, oilseeds, particularly soybeans, are attracting bullish attention. The shift is being driven less by traditional food demand and more by energy policies and industrial usage, which are reshaping global oilseed markets.
Biofuel Policies Drive Structural Demand Growth
Biofuel mandates are emerging as the single biggest catalyst for soybean demand.
Indonesia plans to roll out its B50 biodiesel mandate from 2026, requiring diesel blends to contain 50 per cent palm-based biodiesel. This move will divert a large share of Indonesia’s palm oil output away from exports, tightening global vegetable oil supplies and pushing buyers toward alternatives such as soybean oil.
In the United States, the Environmental Protection Agency’s Renewable Fuel Standard (RFS) proposal for 2026 sharply raises blending requirements for biomass-based diesel. Mandated volumes are expected to rise to 7.12 billion RINs, reflecting Washington’s push for greater energy security.
Soybean oil remains the dominant feedstock for biodiesel in the US. More than 40 per cent of US soybean oil is already used for biofuel. For the 2025–26 season, industrial demand is expected to absorb nearly 30 per cent of total US soybean production, significantly tightening availability for food and export markets.
Market Performance Highlights Soybean Resilience
Soybeans have already shown stronger price resilience compared with other major crops. In 2025, soybean prices rose by around 4 per cent, while wheat and corn prices declined by 8 per cent and 4 per cent, respectively.
Trade tensions between the US and China continue to influence flows, but they have not derailed soybean demand.
US soybean production is projected to decline marginally to around 116 million tonnes, down about 2.8 per cent, as acreage falls amid trade uncertainty. However, near-record yields have helped cushion the impact.
Meanwhile, Brazil remains China’s primary supplier, with production expected to reach a record 177–180 million tonnes in the 2025–26 season, reinforcing its dominance in global soybean trade.
US Export Strategy Undergoes a Shift
Heavy dependence on Chinese demand is prompting a strategic rethink among US exporters.
To reduce exposure to trade volatility, US agribusinesses are increasingly focusing on diversifying export destinations, particularly in East Asia and North Africa. There is also growing interest in downstream investments, including setting up crushing facilities in the Middle East and Southeast Asia.
By exporting soybean meal and oil instead of raw beans, the US hopes to capture more value while reducing reliance on a single buyer.
Tightening Global Supply-Demand Balance
According to the International Grains Council (IGC), the soybean market is entering a tighter phase.
Global soybean production for 2025–26 is estimated at 426–428 million tonnes, slightly lower than the previous season. In contrast, global consumption is projected to reach a record 431 million tonnes, pushing the market into a deficit.
As a result, carryover stocks are expected to decline by about 5 million tonnes, leaving global inventories at a relatively tight 77 million tonnes, reducing the buffer against supply shocks.
Conclusion
Soybeans are emerging as one of the most structurally supported agricultural commodities heading into 2026. Strong biofuel-driven demand, tightening global balances, and strategic trade realignments give soybeans a clear edge over grains. However, weather risks remain the key variable. A potential La Niña event, which often brings drought to South America, could sharply reduce Brazilian output and amplify price volatility later in 2026.