China rejects US soybeans despite slow harvest in Brazil

A delayed harvest in Brazil may widen the export window for U.S. soybeans, but both overall shipments and China’s participation in U.S. bean purchases have remained sluggish recently, Reuters reported.

U.S. soybean export sales from the U.S. to China increased by mid-January, but this may have been an isolated event, analysts said. Weekly volumes have been mostly below average over the past couple months. As of Jan. 23, U.S. export sales to China accounted for 47% of all shipments, a 17-year low excluding the period of trade tensions of Trump’s first term.

Another 9% came from unknown destinations, which is close to normal and not indicative of Chinese purchases being hidden. In terms of volume, Chinese orders for U.S. soybeans are down 3% from a year ago.

Meanwhile, Chinese consumption is well behind normal due to smaller shipments from Brazil. November-December imports are down 15% from a year ago despite an equivalent increase in U.S. shipments. In addition to the Brazilian delays, China’s agriculture minister said last week that the country’s pork sector has recovered from a loss-making phase, which in theory should continue to support soybean demand. China’s soybean processing margins have also improved in recent weeks.

Supplies of competitively priced Brazilian beans should increase from next month. Based on shipment schedules, Brazil’s February soybean exports are expected to be above average and possibly even surpass last year’s volumes, despite harvest delays this year.

Despite USDA’s below-average export forecast for 2024/25, U.S. soybean sales to other countries are up 30% from last year and are the third highest on record. Sales to Europe, in particular, are well above normal. But China remains crucial, accounting for 54% of all US soybean exports in the 2023/24 season.

It is unclear whether this trade flow will be further threatened as US President Donald Trump on Thursday considered imposing duties on Chinese goods, possibly as early as this weekend. However, soybean prices reflect the gloomy situation, especially relative to corn. U.S. farmers are expected to give up a significant number of acres of soybeans this spring compared to last year in favor of the yellow grain, which could help keep U.S. soybean supplies under control.

Earlier, it was reported that China’s share of soybean imports to China from the U.S. fell from 40% to 18% in the first 11 months of 2024, while Brazil’s share rose from 46% to 74%.

Tags: China, Brazil, soybean