US soybeans cheaper than Brazilian supplies, but China’s demand constrained by negative crush margins

US soybeans have gained a price advantage over Brazilian supplies on the global market, potentially supporting increased shipments to China toward the end of 2026. According to S&P Global, as of October 15, US soybeans for November shipment were assessed at $505.23/t FOB New Orleans, compared with $517.38/t FOB Santos for Brazilian soybeans. This made US supplies approximately $12/t cheaper. However, Chinese buyers are reluctant to increase purchases due to sufficient soybean inventories and poor crushing profitability.

Weak demand is reflected in the results of auctions held by China’s state-owned company Sinograin. At the October 13 auction, only 209.9 thsd tons of imported soybeans were sold out of 517.9 thsd tons offered, representing 40.5% of the total volume. The average transaction price was 4,298.4 yuan/t, or approximately $642/t. The auction included soybeans from the 2023, 2024 and 2025 harvests. Another auction, offering 504 thsd tons from state reserves, is scheduled for October 20.

One of the main reasons for subdued demand is the negative profitability of soybean crushing in China. According to Platts, gross crush margins stood at minus $19.52/t on October 15, deteriorating by $4.25/t from the previous day. Some market participants estimate crushing losses for nearby shipments at approximately $25/t. Moreover, even relatively low prices at state reserve auctions do not always make purchases economically attractive because of additional delivery and inland logistics costs. According to traders, Chinese crushers are currently well supplied with soybeans, with existing inventories and contracts potentially covering requirements through January 2027.

Despite weak demand at domestic auctions, China continues to purchase US soybeans. The USDA confirmed sales of 470 thsd tons to China on October 14, followed by another 330 thsd tons the next day for delivery in the MY 2026/27. Market participants report renewed interest in nearby US shipments, while demand for more expensive Brazilian supplies remains limited. However, the actual competitiveness of suppliers depends not only on export prices but also on ocean freight and delivery costs to Chinese buyers.

Brazilian traders believe that the current price advantage of US soybeans is largely seasonal and does not indicate a long-term displacement of Brazil from the Chinese market. Cheaper US supplies could attract additional demand for shipments in late 2026 and possibly January 2027. However, a significant share of Chinese importers’ new-crop soybean requirements has already been covered by contracts with Brazil. Further competition between the two largest exporters will depend on price movements, the profitability of Chinese crushing plants and the pace of soybean inventory replenishment.

Tags: China, Brazil, prices, soybean, USA