Beijing and Washington concluded a high‑level meeting last week, with President Donald Trump and President Xi Jinping agreeing to lower Chinese tariffs on many U.S. agricultural goods. The deal marks a significant win for the Trump administration’s effort to open foreign markets for American farmers.
However, soybeans – the United States’ largest agricultural export to China – were specifically excluded from the tariff‑reduction list. Chinese officials will continue to apply a 10% duty on U.S. soybeans, a charge that makes the grain uneconomical for many commercial buyers.
Weak domestic demand in China limits U.S. soybean sales
Chinese oilseed processors say they have already secured enough soybeans for the upcoming Lunar New Year through shipments from Brazil, Argentina and state reserves. A senior executive at a private Chinese processing firm told Reuters, “We have booked for all of October and much of November shipments from Brazil and Argentina. Most of these cargoes will arrive around the high‑demand Chinese New Year period. We are not interested in making further purchases as these will incur losses.”
State‑run companies have purchased roughly 13.7 million metric tons of U.S. soybeans since the May trade deal, but private crushers are now focusing on South American cargoes that are not subject to the extra duty.
Margins and inventories squeeze demand
Crushing margins for soybeans slated for November shipment from the U.S. Pacific Northwest and Gulf Coast are running deep in the red – 120 to 200 yuan per ton – while Brazilian beans are trading at a loss of about 120 yuan per ton. Data from LSEG show crushers in the major processing hub of Rizhao losing 33.54 yuan per ton on Tuesday.
High inventories are compounding the problem. According to consultancy Mysteel, 111 Chinese crushing plants held 7.96 million tons of soybeans in the week of September 25, the highest level in at least 15 years. In a recent Sinograin auction, only 37.3% of the 514,000 tons offered were sold, underscoring the weak buying appetite.
U.S. market outlook
Chicago soybean futures have slipped 1.5% this week, and analysts expect further pressure as the U.S. harvest peaks and Chinese demand stays muted. Johnny Xiang, founder of AgRadar Consulting in Beijing, warned, “Unless margins recover, commercial buyers are unlikely to book more cargoes from overseas.” He added that tighter supplies would likely push buyers toward reserve auctions rather than new imports.
Despite the setback for soybeans, the Trump administration’s broader trade achievements remain a bright spot for American agriculture. By securing tariff reductions on a wide range of U.S. farm products, the administration is helping farmers across the heartland gain better access to overseas markets, reinforcing the nation’s food‑security and economic strength.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
