This paper proposes a new framework to include the interaction of vertically differentiated goods, which was largely ignored in previous studies, to analyze the market power of exporters and importers in world markets of agricultural commodities. The framework is applied in an empirical study of world soybean markets. The empirical analysis of world soybean markets in this paper can provide more accurate estimation results of residual demand and supply elasticities and better measures of the market power in world soybean markets. The new estimation results and measures will improve the profession’s understanding of the functioning of world markets of non-GM and GM soybeans and have significant policy and welfare implications.