China Turns From U.S. Soybean Market, Fueling Downturn in Grain Prices

China excluded, U.S. exports of soybeans and corn have been good, said Andrew Frankenfield, a grain crops educator with Penn State Extension. The European Union, Mexico and numerous Southeast Asia countries are important buyers of U.S. soybeans.

The reason, Frankenfield said, is the expected good yield nationwide, which could have a direct impact on prices realized by growers in Pennsylvania and the eastern U.S.

“Storage at harvest is expected to be an issue in the Midwest,” Frankenfield said. “That’s driving their basis down, making it more enticing to possibly ship some of that crop to the East.”

With a lack of storage forcing some Midwest producers to sell corn and soybeans out of the field this fall, the arrival of that grain in the East will increase the supply and could weaken the basis in eastern states, according to Frankenfield.

And then there’s the weather.

Frankenfield said Pennsylvania corn and soybean crops look good, but current dry conditions could cause smaller bean size, thus reducing yields.

Low yields and potentially poor test weight could compound the weak price for farmers.

Meanwhile, China’s role, or lack thereof, as an importer of U.S. soybeans will continue to be an issue unless an agreement is reached prior to harvest.

“China not buying soybeans yet is impacting Pennsylvania farmers, and if they don’t purchase any before the end of the year, the price is not expected to come up,” Frankenfield said.