Soybean spot and futures prices rise, putting pressure on downstream deep-processing companies' costs

Securities Times reporter Sun Xianchao

Over the past half year, domestic soybean futures and spot prices in China have continued to rise. Although the market has recently seen choppy consolidation and adjustment, industry insiders remain generally optimistic about the outlook.

Industry experts and interviewed industry analysts believe that, while the overall global soybean supply-and-demand balance is currently relatively loose, China’s domestic market shows a clear structural mismatch in supply. Combined with multiple factors such as divergence in overseas producer countries’ output and disruptions from geopolitical developments, soybean prices in the future are expected to remain at relatively high levels.

Rising soybean prices are directly passed through to the cost side of listed companies involved in downstream soybean deep-processing. In this context, steady production and ensuring supply, as well as improving risk-prevention and risk-control layouts, have become increasingly crucial. Under these circumstances, the reasonable use of the futures market’s hedging (cover) functionality to mitigate business risks has become an important choice for relevant listed companies to respond to price volatility.

Soybean prices rise out of season

Since October 2025, domestic soybean futures and spot prices in China have shown a trend of sustained increases, breaking the traditional seasonal decline pattern. After the benchmark soybean futures contract reached a temporary peak in mid-March 2026, it fell back. In this round of price moves, the highest increase exceeded 25%. As of early April 2026, prices were still up nearly 16% compared with October 2025.

“In this round of trading, the timing and pace in the futures and spot markets differ somewhat. China’s soybean futures benchmark contract began a trend-based rally starting in October 2025; the cumulative increase for that month was 4.46%, equivalent to 175 yuan/ton. But over the same period, soybean spot prices were moving downward.” Hou Xueling, an analyst covering oils and oilseeds at the Research Institute of Everbright Futures, said.

“The core reason for this divergence is that, at that time, the spot market was under pressure from the集中上市 (concentrated listings) caused by faster harvesting of new beans, while the futures market had already picked up a structural contradiction—namely, a reduction in high-protein soybean supply—so prices started rising earlier than in the spot market.” Hou Xueling said. “From November 2025 onward, the soybean spot market entered a pattern of catching up; futures and spot prices rose in parallel. The spot market’s peak price also appeared in mid-March. In Suining Haita (Taliang), the price reached 2.42 yuan per jin, up 10% from the end of September 2025 and up 18.6% from the end of October 2025; in Anhui Huaibei (Jingliang), the price reached 2.85 yuan per jin, up 5.5% from the end of September 2025 and up 14% from the end of October 2025. Spot price gains were lower than futures mainly because the futures market primarily reflects prices of high-protein soybeans, whereas the spot market reflects the overall行情 (market situation) for both low-protein and high-protein soybeans.”

Liu Mei, a soybean analyst in the Agricultural Products division of Shanghai Steellink (Shanghai Ganglian), told the Securities Times reporter that since October 2025, the rise in domestic soybean futures and spot prices can be divided into three stages—each revolves around the core contradiction of “structural shortage of high-protein soybeans,” but the drivers differ across stages: the first stage was triggered by a poor harvest in southern regions and delayed harvesting in the northeast; the second stage benefited from the release of demand for pre-holiday stockpiling and policy-backed support; the third stage was driven by tighter residual supplies at the grassroots level and a resonance with resumption of work and production.

Hou Xueling believes that this out-of-season rise in domestic soybean prices deviates significantly from the industry’s earlier expectations. Before the rally began, the market had formed a consensus expectation of a bumper harvest of soybeans; the industry generally took a bearish view on prices, and trading strategies were mostly short/bearish—sellers over-issued and presold, while buyers delayed procurement. But in the end, domestic soybean prices followed an upward logic driven by scarcity of high-protein soybean supply, creating a huge expectation gap compared with how the industry generally operated, which in turn triggered the out-of-season rally. After that, factors such as increases in purchase prices at origin, rising imported soybean prices, higher corn prices, and farmers’ reluctance to sell helped provide external support for sustained upward moves, pushing prices higher continuously.

Supply faces structural mismatches

Supply-and-demand relations are one of the core factors determining commodity prices. The combined soybean output of the United States, Brazil, and Argentina accounts for about 80% of global total production, and dominates the global soybean supply landscape. In recent years, China’s soybean import scale has entered a phase of rapid growth, making it the world’s largest soybean importer.

According to customs data, in 2025 China’s soybean import volume reached 118 million tons, up 6.5% year over year, setting a historical record.

At a recent meeting on high-quality development of the soybean industry in Heilongjiang Province, Wang Liaowei, Director of the Commodity Supervision Technology Support Division of the National Grain and Material Reserves Data Center, said that based on shipping schedule monitoring, China’s soybean import volume for January to February 2026 was 12.54 million tons, down 7.8% year over year; in March, arrivals are expected at 7.5 million tons. With Brazilian soybeans arriving gradually, from April onward China’s soybean import volume will further rebound.

As the Securities Times reporter learned earlier, among China’s main soybean producing areas, Heilongjiang Province grows non-GMO soybeans with a relatively higher protein content. These are mainly used for food processing to meet domestic consumption demand. By contrast, soybean oil extraction yields for soybeans imported from Brazil and other countries are higher; these imports are mainly used for edible oil production and feed processing for soybean meal.

Under strong policy promotion, domestic soybean output has increased steadily in recent years. Wang Liaowei introduced that China’s soybean output has remained above 20 million tons for four consecutive years. In 2025, it reached 20.95 million tons, setting a record high.

Hou Xueling said that although China’s domestic total soybean output in 2025 achieved a bumper harvest, the proportion of high-protein soybeans fell and supply of certain high-protein sources became scarce, resulting in a larger price-upward elasticity for high-protein soybeans. Specifically, soybeans in the northeastern producing area have excellent quality and a relatively higher share of high-protein beans, while in other provinces and regions the share of high-protein soybeans declined due to weather impacts. Meanwhile, factors such as higher costs for imported soybeans and higher corn prices have provided solid bottom support for domestic soybean prices, driving the overall upward movement of domestic soybean prices.

“Overall, the global soybean supply-and-demand pattern for the 2025/2026 crop year is relatively loose. Global soybean output is expected to be 427 million tons, flat year over year; total demand is 425 million tons, up 11 million tons year over year; and ending stocks are 125 million tons, up 8B tons year over year.” Wang Liaowei noted that, at this stage, besides supply-and-demand relations, it is also necessary to focus on the chain reaction effects of the US-Iran war on global agricultural commodity prices: first, higher crude oil prices raise agricultural commodity logistics costs; second, increases in crude oil and natural gas prices raise costs of agricultural inputs such as synthetic ammonia and nitrogen fertilizers, thereby increasing planting costs for agricultural products; third, higher crude oil prices highlight the economic viability of biodiesel and ethanol, driving increased industrial demand for agricultural products such as vegetable oils and corn.

Multiple measures to absorb cost pressure

At present, the industry mostly holds a bullish expectation for the future trend of soybeans. Chen Yingjian, an expert discussing with the soybean market analysis and early-warning team at the Ministry of Agriculture and Rural Affairs, pointed out that it is expected that high-protein soybean spot prices will continue to remain independent of futures prices and maintain a leading position. During the harvesting period of the new crop,抢收 (rush-harvesting) may happen again. Looking at the medium to long term, over the next 3 to 5 years, balance between China’s soybean supply and demand will become the market norm; it will be difficult to see a situation where production exceeds demand again, and the period that soybean futures trade in high-price ranges may gradually become normalized.

Liu Mei also said that because the soybean-to-corn profit ratio is insufficient, the market’s judgment suggests that planting willingness for soybeans in the 2026/2027 crop year has declined. Coupled with rising costs of agricultural inputs such as land lease expenses and fertilizers, planting costs are expected to increase, so the opening price for newly harvested soybeans at new auctions/starting trading is expected to rise as well. In addition, for the 2025/2026 crop year, China’s domestic soybean ending stocks are at a low level over the past four years. Combined with factors such as external geopolitical disruptions, adjustments to biodiesel policy, and a slightly tighter global soybean supply-and-demand relationship, there are more positive factors for the soybean market in the future. In the medium to long term, prices still have room to rise.

It is understood that soybeans are an important raw material for several listed companies including Zuming Co., Ltd., Weiwie Co., Ltd., Zhu Lao Liu, and Jiahua Co., Ltd. Their price fluctuations directly affect companies’ production costs and operating returns.

In recent institutional research and survey discussions, Zhu Lao Liu disclosed that soybean prices have continued to rise, moving from 4,400 yuan/ton at the beginning of 2025 to 5,000 yuan/ton currently. However, the company has already completed its full-year procurement of soybeans in early 2026 and has built up sufficient inventories of raw material. Therefore, the impact of price fluctuations on the gross profit margin of its fermented bean curd (tofu) business in 2026 will be relatively limited.

Weiwie Co., Ltd. previously stated that according to its analysis, China’s 2026 domestic soybean planting area will remain relatively stable; the volume of newly listed soybeans is expected to stay at a high level. With the overall supply-and-demand situation being relatively loose, this will provide strong assurance for stable supply of non-GMO soybean raw materials, help smooth raw material price fluctuations, and reduce operating costs for the industry.

In response to business risks brought by soybean price volatility, Chen Yingjian suggested that downstream processing companies can reasonably use the futures market’s hedging (cover) function to effectively avoid price fluctuation risks and stabilize operating performance.

Weiwie Co., Ltd. previously issued an announcement stating that to reasonably hedge and avoid risks from volatility in raw material and product prices during production and operations, the company’s subsidiaries plan to carry out hedging (cover) business. Using hedging mechanisms for risk aversion, they will offset the impact of fluctuations in major raw material and product prices and enhance the company’s risk-resilience capacity.