Soybean prices continue to fall as China purchases only half of promised soybeans from the US

Favorable weather for soybean crops in South America and low soybean sales from the US to China are putting pressure on soybean quotes in Chicago, which have been falling for more than a month.

January soybean futures on SWOT have decreased by another 2% since the beginning of the week to $386.6/t (-8% in places) under the pressure of actual data on export sales to China.

Due to the US government shutdown in October and November, the USDA is currently providing export sales statistics with a delay. As of November 27, US soybean export sales were 21.829 million tonnes, down 39.3% from the same period last year.

The USDA reports that less than 5 million tons of soybeans were sold to China, although market participants believe the actual volume is much higher. In addition, almost 3 million tons of US soybeans were sold with an “unknown destination” label, and such shipments may be redirected to the Chinese market during shipment.

According to Bloomberg , China has contracted at least 7 million tons of soybeans from the United States in the past two weeks, but has not fulfilled a promise made to US officials to purchase 12 million tons of American soybeans by the end of 2025.

Sinograin, the state-owned company responsible for managing China’s strategic grain reserves, has played a key role in the increase in purchases. According to sources, the company contracted about 2 million tons of soybeans from the United States last week and this week continued its purchases, purchasing at least seven shiploads totaling more than 400,000 tons.

Sinograin’s activity complements earlier deals by another state-owned company, Cofco, which could potentially accelerate the pace of imports. The purchases come as China is selling off significant amounts of soybeans from its state reserves, freeing up storage capacity for new shipments from the United States.

Grain markets and U.S. farmers are closely watching developments due to limited transparency about the agreements reached after Presidents Donald Trump and Xi Jinping met in late October. China has yet to officially release details of the deal with the U.S., adding to uncertainty about the timelines and mechanisms for implementing commitments.

Adding to the confusion are the different deadlines announced by American officials. Initially, the US stated that the target volume would be reached by the end of the year, but later it was reported that purchases could continue until the end of February – a period when soybean imports from Brazil seasonally increase.

If the favorable weather in Brazil continues, cheap Brazilian soybeans will begin to enter the market at the end of January, which will further increase the pressure on quotes.

Tags: China, prices, soybean, USA