Global soybean market is expecting a sharp drop in prices under pressure from a large supply of American soybeans that China will not buy

China is increasing its purchases of soybeans from South America, but is not buying soybeans from the United States, which worries traders who do not understand who can sell the 20-30 million tons of American soybeans that China will refuse if a trade agreement between the countries is not signed in the near future.

So far, China has not purchased a single shipment of new crop soybeans from the United States, although usually up to 14% of the expected purchase volume has been contracted before the harvest begins. China will use this situation to pressure Trump in negotiations.

In the MY 2023/24, China purchased 25 million tons of soybeans from the United States for $13.2 billion, which is 54% of all soybean exports from the United States.

According to Oil World (Germany), global soybean exports continued to grow in the first half of August, as the 5 largest exporting countries increased supplies by 30% compared to the same period in 2024 due to high demand from China, Egypt, Mexico, the EU and other countries.

Thus, between August 1 and 18, Brazil increased its exports of soybeans compared to the corresponding period last year from 4.32 to 5.17 million tons, soybean meal from 1.05 to 1.23 million tons, and soybean oil from 88 to 95 thousand tons.

Between August 1 and 17, Argentina increased soybean exports by 500,000 tons compared to the same period in August 2024, to 760,000 tons, of which 700,000 tons were delivered to China and 42,000 tons to Iraq.

Soybean exports from the US in the first two weeks of August increased by 0.26 million tons compared to last year to 1.02 million tons, but there have been no deliveries to China for 11 consecutive weeks.

According to Chinese customs data, China’s total soybean imports in July reached a record high of 11.67 million tonnes, driven by strong purchases of Brazilian soybeans and concerns that US imports would not recover due to tariffs. Imports from Brazil rose 13.9% to 10.39 million tonnes, accounting for 89% of the total, while imports from the US fell 11.5% to 420.87 thousand tonnes. At the same time, imports from Argentina rose to 561.03 thousand tonnes.

According to Bloomberg, the American Soybean Association sent a letter to Trump (who won thanks to the support of farmers) asking him to reach an agreement with China to lift tariffs and increase soybean purchases, as soybean farmers are approaching a financial cliff and will not be able to withstand a prolonged trade war.

November soybean futures on the Chicago Board of Trade remained stable at $372/t after a sharp 5.5% jump on August 12 following Trump’s decision to delay tariffs on China for 90 days, but forecasts of a good harvest and a lack of export sales to China will put pressure on prices in the near term. Data on increased soybean processing in the US supported the quotes.

According to NOPA, soybean processing in the US in July increased from 5.37 to 5.6 million tons compared to June (5.26 million tons in July 2024), exceeding expectations and reaching a maximum for this month, and in total in MY 2024/25 amounted to a record 61.2 million tons (compared to 57.6 million tons in September-July MY 2023/24). Despite the increase in processing, soybean oil stocks in the US in July increased by only 1% and are 8% lower than in July 2024, which indicates an increase in domestic consumption of soybean oil, which in July reached an 8-month maximum of 1.1 million tons.

In Ukraine, export prices for GM soybeans delivered to Black Sea ports in August-September rose to $388-392/t amid supply shortages and rising futures prices. Therefore, farmers should take advantage of high starting prices for forward sales, as prices for American soybeans may drop sharply in September due to increased supply and lack of demand from China.

Export prices for non-GM soybeans have decreased to $410-420/t delivered to the port and $450-470/t delivered to buyers in the EU, but demand for such soybeans will continue to decline.

Tags: China, prices, soybean, USA