Looking to the Futures

Soybean oil futures retreated as a broad selloff swept through the soybean complex. December soybean oil (/ZLZ26) fell 3.64 cents last week, a drop of more than 5%, before steadying above 62 cents per pound to start the week. Soybeans and soybean meal also finished the week lower, as fund selling weighed on the market.

Fund positioning has been a major driver of the pullback. Speculators cut their net long position in soybean futures by over 52,000 contracts in the week ending November 3, mostly through long liquidation. In soybean oil, managed money trimmed its net long by nearly 13,000 contracts as new short positions were added. Funds remain net long in both markets, which leaves room for potentially more selling pressure if prices keep sliding.

Biofuel demand remains the biggest source of support for soybean oil. The EPA’s final 2026 biomass-based diesel mandate of about 5.4 billion gallons is up sharply from 3.35 billion in 2025, and the 45Z tax credit, a federal incentive for U.S. producers of lower-carbon fuels such as biodiesel and renewable diesel, now requires North American feedstocks, which favors U.S. soybean oil. U.S. biofuel plants used a record 1.687 billion pounds of soybean oil in July, up about 52% from a year earlier, according to EIA data. Use eased to 1.4 billion pounds in August, with plant maintenance and operational issues cited as the cause, a reminder that monthly demand can be uneven.

Domestic supplies have tightened as biofuel use has pulled oil away from other markets. NOPA members’ soybean oil stocks fell 12.3% in September to 1.05 billion pounds, the lowest level since 2014, while 2025/26 soybean oil exports of just over 828 million pounds are down more than 65% from last year’s record. Demand for soybeans themselves has been healthier. 2026/27 export commitments total 30.2 million metric tons, up 76% from a year ago and 66% of USDA’s forecast versus an average pace of 54%, and USDA reported a 136,000-ton private sale to China on Friday.

In the near term, traders will be watching Tuesday’s USDA WASDE and Crop Production reports. Expectations are for the soybean yield to be raised 0.4 bushel to 53.5 bushels per acre, which would lift production by 34 million bushels to 4.596 billion. A larger crop could add more pressure on soybeans and meal prices, while soybean oil may stay more sensitive to biofuel policy, weekly export sales and energy prices.

This morning, U.S. stock index futures moved higher in the early hours with the S&P 500® (+0.17%), the Nasdaq-100® (+0.01%), the Russell 2000® (+0.14%), and Dow Jones Industrial Average® (+0.44%) all in the green. 

In Asia, major indexes closed higher with the Shanghai (+0.08%), the Hang Seng (+0.44%), and the Nikkei (+2.87%) posting gains. 

European trading saw the CAC (+0.94%), the FTSE (+0.22%), and the DAX (+1.12%) higher by midday. 

Crude Oil futures (/CLZ26) closed Monday’s session lower (–4.90%), as hopes for a U.S.-Iran peace deal and signs of recovering Middle East exports pushed December WTI to below $87 a barrel, its lowest level since late August. President Trump said fresh strikes on Iran were highly unlikely while talks progress, although tanker attacks near the Strait of Hormuz continued and OPEC+ kept December output unchanged. JPMorgan estimates the global market moved into a surplus of 1.4 million barrels per day in October, while EIA data showed U.S. commercial crude stocks fell 0.9 million barrels to 409.8 million in the latest weekly report.

Feeder Cattle futures (/GFX26) closed higher to start the week (+1.87%), as buyers stepped in after a steep selloff that sent the soon to expire November feeder cattle down more than $15 last week. Supplies remain tight, with USDA’s October Cattle on Feed report showing September placements down 12% from a year ago to the lowest September total on record, while Mexican feeder cattle imports were still only about 16% of year-ago levels in September as border crossings reopen gradually. However, the CME Feeder Cattle Index fell to $337.41 on November 5, cash fed cattle trade has softened to $214 to $218, and managed money is continuing to trim its net long position in feeder cattle futures and options, suggesting additional fund selling could still pressure prices.

Cocoa futures (/CCZ26) closed lower Monday (–2.93%), with December falling to around $5,000 per metric ton and extending a three-week slide as ICE-monitored cocoa inventories climbed to a 2.5-year high of about 3.75 million bags. Selling pressure has also come from a weaker Brazilian real, which has raised concerns that Brazilian exporters could step up sales, and from a 2.5% decline in North American third-quarter grindings, although Asian grindings jumped 29% and European grindings rose 3.2%. Still, forecasts for smaller 2026/27 crops in Ivory Coast (down 18% to about 1.8 million tons) and Ghana (down 13%), along with El Niño risks, have some private forecasts projecting a much smaller global surplus going into 2027, which could limit further downside.

Major economic reports, trading events, and news items that could potentially impact specific futures markets:

ADP Weekly Employment Change (interest rates and stock indices)

NFIB Business Optimism Index for October (interest rates)

Consumer Price Index for October (interest rates and stock indices)

USDA World Agricultural Supply and Demand Estimates (WASDE) for November (grains and Cotton)

Factory orders for September (interest rates)

10-year Notes

Fed Governor Christopher Waller, Vice Chair for Supervision Michelle Bowman, Dallas Fed President Lorie Logan, and Kansas City Fed President Jeff Schmid are scheduled to speak today. 

New futures products are available to trade with a futures-approved account on all thinkorswim platforms: 

• Ripple (/XRP)
• Micro Ripple (/MXP)
• 100 OZ Silver (/SIC)
• 1 OZ Gold (/1OZ)
• Solana (/SOL)
• Micro Solana (/MSL)

Visit the Schwab.com Futures Markets page to explore the wide variety of futures contracts available for trading through Charles Schwab Futures and Forex LLC.