Indian Soybean Squeeze: Modest Crop Loss, Strong Global Underpinning

Source CMB News

Posted on October 26, 2026

India’s 2026 soybean output is projected to decline 2.11% year-on-year to 10.763 million tonnes due to uneven monsoon rainfall and drought in Maharashtra. Higher production in Madhya Pradesh may partly offset losses, while tighter domestic supplies could pressure crushing margins, edible oil availability and feed costs.

India’s 2026 kharif soybean crop is shaping up slightly smaller but regionally unbalanced, with drought-hit Maharashtra offset by stronger output in Madhya Pradesh. This modest national decline tightens domestic seed and meal availability and adds a weather-risk premium to regional fundamentals, even as global futures ease from recent highs. Crushing margins, edible oil prices and protein feed costs in India are all exposed to final harvest results and any further downgrades. India’s soybean market enters late October with production estimates pointing to a roughly 2.11% year-on-year drop in national output to about 10.763 million tonnes, after inadequate monsoon rainfall in key kharif-growing belts. Maharashtra is expected to see a particularly sharp hit to yields, while Madhya Pradesh consolidates its role as the country’s dominant producer, partly cushioning the national shortfall. For crushers, feed manufacturers and importers, the key questions now are how much of the drought damage is already priced in, and whether global supplies and softer CBOT prices can offset India’s tighter balance sheet.

Prices

Physical soybean indications in our panel have been broadly stable in the second half of October despite mounting concerns over India’s kharif crop. Indian soybeans (sortex clean, FOB New Delhi) are quoted at 0.89 EUR, unchanged from the previous assessment, underlining firm domestic values in the face of tighter seed availability. Ukrainian soybeans (FOB Odesa) are shown at 0.333 EUR, also steady, while US No. 2 soybeans (FOB Washington D.C.) hold at 0.58 EUR.

GMO-free Ukrainian soybeans (CPT Odesa) are indicated at 0.396 EUR, with only marginal week-on-week movement, and Chinese yellow soybeans (FOB Beijing) stand at 0.74 EUR, with organic yellow soybeans at 0.85 EUR. This constellation suggests that while global futures have eased from early-September highs, physical bids around the Black Sea and in Asia remain supported by freight, currency, and quality spreads rather than by aggressive origin competition.

Supply & Demand

India’s soybean production in the 2026 kharif season is expected to decline by around 2.11% to roughly 10.763 million tonnes, down from about 11.025 million tonnes in the previous season, as inadequate and uneven rainfall curbs cultivation and yields. Maharashtra is set to record a significant production decline amid declared drought conditions, while Madhya Pradesh remains the largest soybean-producing state and is projected to increase output, cushioning but not eliminating the national shortfall.

Reduced domestic seed availability will likely weigh on crushing volumes, constraining supplies of both edible oil and protein meal for the feed industry. Local reports already highlight concerns about rising poultry feed and broader food inflation risks as the smaller soybean crop tightens the balance sheet. The ultimate impact, however, will hinge on final harvest data, government policy responses, and whether import arbitrage opens for beans or meal later in the marketing year.

Globally, US soybean futures have softened from early-September peaks, with the November 2026 CBOT contract trading around the mid-1,200s cents-per-bushel area on October 26, down roughly 6% month-on-month as the US harvest progresses. At the same time, Chinese state and private buyers have resumed booking sizable US cargoes for late-2026 and early-2027 shipment, indicating robust import demand and putting a floor under international prices.

Fundamentals

The key fundamental driver in the near term is India’s weather-affected kharif crop. Nationwide monsoon rainfall in June–September finished materially below normal, with pronounced deficits and long dry spells in Maharashtra and parts of Karnataka where soybeans are concentrated. These conditions have already prompted extensive drought declarations and raised expectations of yield losses in rain-fed oilseed areas, substantially reducing Maharashtra’s contribution to national soybean supply.

In contrast, Madhya Pradesh appears relatively resilient in 2026, remaining India’s largest soybean state and even expanding output thanks to more favorable rainfall distribution and better crop conditions. This divergence implies tighter supplies in western and southern domestic markets that traditionally source beans from Maharashtra, while central Indian crushers may see somewhat better seed availability. The net effect is a modest national production decline but a more pronounced regional imbalance, which can support basis levels and transport spreads even if headline futures remain soft.

On the demand side, India’s crushing sector faces a delicate balance. Lower local seed availability, coupled with structurally strong feed demand from the poultry and livestock sectors, points to sustained competition for beans between crushers and direct feed users. If global prices remain comparatively attractive, there is scope for increased imports of oil or meal later in the marketing year, but policy uncertainty and currency volatility may limit the speed of such adjustments.

Weather & Short-Term Outlook

With much of the 2026 kharif crop already formed, weather risks are shifting from yield formation to harvest progress and quality preservation. Recent forecasts from the India Meteorological Department point to scattered showers and thunderstorms in parts of peninsular and eastern India around October 26, with only light, patchy rain in segments of Karnataka and adjacent regions. For most major soybean belts, particularly in Madhya Pradesh and Maharashtra, the monsoon’s retreat reduces the likelihood of severe late-season damage, although localized storms could still disrupt harvesting and drying.

For the next few days, the market’s focus is less on additional yield loss and more on confirming harvested volumes, oil content, and grain quality. Any significant downgrade from current production expectations—especially in drought-affected Maharashtra—would tighten India’s balance further, reinforcing the firm tone in domestic physical markets and potentially stimulating additional interest in imported meal or oil.

Trading Outlook (Next 1–3 Weeks)

Indian buyers (crushers, feed mills): Consider locking in a portion of nearby physical coverage while FOB New Delhi values for soybeans hold at 0.89 EUR and before final harvest data or further drought revisions potentially trigger another leg higher in domestic basis levels.
Global exporters: With Ukrainian FOB Odesa soybeans at 0.333 EUR and US No. 2 soybeans at 0.58 EUR, monitor Indian import parity for meal and oil; any uptick in domestic prices or policy relaxation could quickly translate into incremental demand for non-GMO and GMO-free origins.
Speculative participants: CBOT futures have already corrected around 6% over the past month; given India’s weather concerns and renewed Chinese buying, downside may be increasingly limited near term, arguing for cautious positioning rather than aggressive new shorts.

3-Day Price Direction Snapshot

Origin	Specification	Location / Terms	Latest Price (EUR)	3-Day Bias
India	Soybeans, sortex clean	New Delhi, FOB	0.89 EUR	Firm to slightly higher on tight domestic crop
Ukraine	Soybeans	Odesa, FOB	0.333 EUR	Sideways; export flows steady, no major new driver
United States	Soybeans, No. 2	Washington D.C., FOB	0.58 EUR	Sideways to mildly higher, tracking CBOT stabilization