Everyone Loves November Soybeans Right Now. History Doesn't!

The November soybean rally to contract highs is driven by a unique mix of robust domestic biofuel crush demand, geopolitical energy shocks restricting supply, and recent Chinese buying sprees. Here is the breakdown of why the market is behaving this way and the likelihood of a seasonal crater. 

Why Soybeans Are Rallying

1. Biofuel Demand & The Strait of Hormuz
Conflict in the Strait of Hormuz and related tensions have pushed global crude oil prices significantly higher. As crude and heating oil surge, the economics for biomass-based diesel (renewable diesel and biodiesel) become highly profitable. Commercial traders, specifically domestic crushers and livestock integrators, are locking in long positions as record domestic crush margins pull physical supplies out of the market. 

2. Supply Disruptions and Weather
Beyond biofuels, geopolitical turmoil—particularly in the U.S.-Iran and Russia-Ukraine regions—has restricted global grain transportation, injecting a general war-risk premium into agricultural commodities. Furthermore, weather concerns (such as hot, dry soils) in critical growing regions are mitigating downside risks and encouraging aggressive commercial buying. 

3. The Speculator Disconnect
The contrast between managed money and commercial players explains the rally's technical structure. Commercials are aggressively buying because they need the physical beans to run their crush plants and fulfill oil contracts. Managed money (the trend-following funds), however, remains uncommitted, holding near equal longs and shorts. They are hesitant because they view the overall global supply as robust despite localized tightness. 

Could Prices Crater from Here?

A seasonal sell-off is a distinct possibility, and if the market turns, it could experience a sharp drop. Here is why a downward correction could materialize:

• Crop Size Reality: Despite tightening old-crop balance sheets, the market may still be looking at historically large U.S. and global production figures. If ideal summer weather persists without major August droughts, yields could expand, easing current supply anxieties.
• Fund Liquidation: Managed money's neutral, equal-long-and-short positioning means they are not currently driving the market. However, if any bearish news (e.g., beneficial rain or a cancellation of export sales) causes prices to break technical support levels, these trend-followers could quickly liquidate, exacerbating a swift downward move.
• "Sell the Rumor": The market often suffers from "buy the rumor, sell the fact." Large, sudden Chinese purchase announcements have been providing quick price spikes. If Chinese buying halts or South American supplies become increasingly competitive on the world stage, that risk premium will evaporate.

Technical Picture 

Source: Barchart

November beans have a textbook uptrend. Higher highs and higher lows accompanied by a rising daily 50 simple moving average (SMA). Writing about selling a market like this isn't something I do often. But as we will soon discuss, some factors are emerging that could turn the market quickly. Personally, I will still wait for a trend change before entering a short position. 

Disaggregated Commitment of Traders Report 

Source: Barchart 

The first alarm is sounding as November soybean futures are trading near contract highs of $12.41'0, set in December 2022. The Disaggregated COT report shows a divergence in managed money sentiment (blue line). Typically, managed money traders are trend followers. Notice how when the blue line is going up, adding more long positions, the price action trends higher; when the line drops, the price declines. As prices have traded higher since January 2025, managed money has kept a bullish posture. Now that prices are at contract highs, managed money is not impressed with the idea of higher prices. The red arrows show the historical pattern of rising prices, and there is now a significant divergence among trend followers.

Commercial traders (red line) are still net short, but only at the mid-point of their 12-month range. This indicates that their buying is not exactly exuberant enough to support trading through contract highs and maintaining that level.   

Seasonal Pattern 

Source: Moore Research Center, Inc. (MRCI) 

While the news and price action are currently bullish, let's face it: grains decline into harvest more often than they don't. And a contract trading at contract highs before a seasonal decline is hard to ignore. Could I be wrong? Of Course! But these red flags are worth paying attention to, to see whether a significant opportunity can arise from this year's out-of-character price behavior. 

MRCI has identified an optimal sell window that traditionally signals harvest lows rather than new contract highs. The 15-year pattern (blue line) shows that prices typically decline abruptly during this optimal seasonal window. Through historical testing and hypothetical trading, MRCI has found that the November soybean contract has closed lower on August 06 than on July 28 for 14 of the past 15 years, a 93% occurrence. During this period, the net profit per standard contract was $1,423.33. There was one losing year resulting in a $125 loss. The following table is where the wow factor is found. Study the Worst Equity Amount column. Seven of those years are blank because, during each of those years, the contract did not experience a daily closing drawdown. Here is a seasonal pattern with a 47% historical track record of no daily closing drawdowns during the optimal seasonal window. 

Source: MRCI 

If this trade sounds like a holy grail trade, please read this disclaimer:

As a crucial reminder, while seasonal patterns can provide valuable insights, they should not be the basis for trading decisions. Traders must consider technical and fundamental indicators, risk management strategies, and market conditions to make informed, balanced trading decisions.     

Assets to Trade the Soybean Market 

Soybean Futures Contracts - Standard (ZS) Mini (XK) Micro (SE):

• Soybean futures, traded on the Chicago Board of Trade (CBOT) through CME Group, are standardized contracts that allow buyers and sellers to agree on a price for soybeans to be delivered on a future date (e.g., November 2026 futures). 

Soybean Options Contracts:

• Options on soybean futures, also traded on CBOT, give speculators the right, but not the obligation, to buy (call) or sell (put) soybeans at a specific price before or at expiration. These are useful for seasonal trading, allowing speculators to capitalize on price volatility (e.g., weather-driven spikes in June) with defined risk. 

Agricultural ETFs (SOYB):

• Exchange-traded funds (ETFs) provide exposure to soybeans without direct futures trading. This makes it accessible for speculators targeting seasonal price movements in soybeans.

In Closing…

The next few weeks could become one of those rare moments when every trader is looking at the same chart but seeing something entirely different. Bulls see strong crush demand, geopolitical uncertainty, and resilient buying as reasons for prices to push into new territory. Bears see a market pressing against contract highs just as harvest season approaches, with history suggesting that optimism can disappear far faster than it arrived. When markets become this emotionally charged, they often reward patience more than prediction. The first side to lose conviction may hand the other an exceptional opportunity.

Whether November soybeans continue their climb or suddenly give way to the weight of expanding supplies, one thing seems increasingly clear. This market is approaching a decision point that could define the rest of the season. It is rare for bullish headlines, technical strength, conflicting Commitment of Traders data, and a 93% seasonal tendency to all coincide. That combination deserves more than a passing glance. It deserves a place on every trader's watchlist, because if history decides to rhyme once again, the move that follows may be remembered long after the headlines that created today's rally have faded.