Tariffs limit China’s purchases of US soybeans despite stronger buying interest

Despite reports of increased Chinese purchases of U.S. soybeans, global market participants believe that existing tariffs remain the main obstacle to a significant expansion of imports. According to S&P Global Commodity Insights, as of July 20, the USDA had confirmed sales of 1.996 mln tons of U.S. soybeans to China this year, well below the U.S. target of 25 mln tons annually by 2028.

Traders say Chinese demand for U.S. soybeans exists, but the current 13% tariff makes them less attractive for private importers. State-owned companies remain the main buyers, while commercial importers continue to favor Brazilian soybeans due to their better price competitiveness.

News of Chinese purchases, together with weather concerns in the United States, supported soybean futures. On July 20, CBOT August and November soybean contracts gained more than 20 cents per bushel. However, market participants say that without changes to trade policy, the potential for further growth in U.S. soybean exports to China will remain limited.

The market is also watching for a possible meeting between U.S. President Donald Trump and Chinese President Xi Jinping, which is expected to take place in September. However, traders remain uncertain whether the talks will result in any meaningful reduction or removal of tariffs and are not pricing such an outcome into the market.

Meanwhile, Brazil continues to be China’s preferred soybean supplier. A record harvest, competitive prices, and reliable logistics keep Brazilian soybeans the most attractive option for Chinese buyers. Market participants also expect demand for Argentine soybeans to increase, as they are also priced below U.S. supplies.

Analysts note that strong global demand and higher futures prices continue to support Brazilian soybean prices despite the country’s record crop. At the same time, some traders expect prices to ease once Brazil’s second corn harvest accelerates and market attention shifts toward the 2026/27 soybean season.

Tags: China, soybean, USA