China could face soybean supply squeeze as Brazilian stocks tighten

Chinese soybean crushers could face tighter supplies in the fourth quarter as available stocks in Brazil decline and tariffs keep US soybeans relatively expensive. China’s private crushers have largely avoided US soybeans due to an additional 10% import tariff, while South America’s marketing season is approaching its end.

Importers have largely covered their October needs and booked 4.8 mln tons of soybeans for November, equivalent to around 60% of projected demand. However, purchases for December and January have barely begun, while Brazil’s next soybean crop will not become available until early 2027.

Brazil has limited scope to increase shipments to China toward the end of the year due to strong domestic demand and advanced farmer selling. By the end of July, Brazilian farmers had sold 82% of the 2025/26 soybean crop, compared with 78% a year earlier, and analysts estimate that the figure may now be approaching 85%. By August 25, Brazilian soybean shipments to China were 2.6 mln tons lower than a year earlier.

US soybeans could become one option to cover the supply gap. Following the May meeting between the leaders of the two countries, Chinese state-owned companies purchased around 11 mln tons of US soybeans, while private crushers have largely stayed away from the US market because of tariffs. Market participants hope upcoming US-China talks could lead to an easing of trade restrictions.

However, crushing economics remain weak even without the additional 10% tariff. Theoretical crush margins for US and Brazilian soybeans for October-December shipment are negative by 150–230 yuan ($22–34) per ton. Additional pressure comes from an expected decline in China’s pig herd in the fourth quarter, which could weaken demand for soybean meal.

Tags: China, Brazil, soybean, soybean meal, USA