China's Absence in U.S. Soybean Market Signals Renewed Agricultural Trade Tensions

China Halts U.S. Soybean Purchases Amid Renewed Trade Tensions

U.S. agricultural markets are grappling with significant uncertainty as China, the world's largest soybean importer, has demonstrably stepped back from purchasing American soybeans for the new marketing season. This strategic shift, marking the first instance since records began in 1999 that China has not booked a single U.S. soybean cargo by September 11, underscores a re-emergence of agricultural commodities as a pivotal tool in broader trade negotiations between Beijing and Washington. The move follows a period of fragile truce and signals a renewed emphasis on diversifying supply chains away from the United States.

Unprecedented Absence in the New Marketing Season

Data from the U.S. Department of Agriculture (USDA) confirms that as of September 11, China had not placed any orders for U.S. soybeans for the 2025-26 marketing season. This is a stark contrast to previous years; in 2024, U.S. soybeans constituted a fifth of China’s total imports, valued at over $12 billion, and represented more than half of the entire U.S. soy export value. The current absence of Chinese demand is exacerbating an already challenging environment for U.S. farmers, who are contending with near-record low prices amidst bumper harvests. Chinese importers, conversely, have proactively secured substantial supplies from Brazil and possess ample domestic inventories, which has alleviated any immediate pressure to procure American goods.

Strategic Diversification and Market Impact

Beijing's strategy is multifaceted, driven by a desire to reduce dependence on U.S. agricultural goods and to leverage commodity purchasing power in geopolitical trade discussions. Chinese crushers and pig farmers, having adapted since previous trade disputes, have secured several months' worth of supply, largely from South American nations. For instance, in July 2025, China's soybean imports from Brazil surged by 13.92% year-on-year to 10.39 million tonnes, while U.S. shipments declined by 11.47%. For the first seven months of 2025, approximately 70% of China's 61.03 million tonnes of soybean imports were sourced from Brazil, with the U.S. share dwindling to just over a quarter. The imposition of tariffs exceeding 20%, and in some instances reaching 34%, on U.S. soybeans entering China has rendered American supplies uncompetitive against the lower-cost offerings from countries like Brazil. Consequently, Brazilian soybeans are estimated to fulfill 95% of China's October demand. This strategic pivot also extends beyond soybeans, with China reportedly curtailing purchases of U.S. corn, wheat, and sorghum for the new season, while continuing to source these grains from alternative suppliers.

Broader Economic Implications and Historical Context

The repercussions for U.S. agriculture are substantial. Soybean futures in Chicago are hovering near multi-year lows, with November 2025 contracts trading at $9.85 per bushel, a price point often below breakeven for many growers. Analysts project U.S. soybean prices could fall to $410 per metric ton in 2025, representing a 15% year-over-year decline. The USDA has revised its 2025/26 U.S. export forecast for soybeans downward by 20 million bushels to 1.745 billion, marking the lowest export level in 11 years. This situation is prompting grave concerns among U.S. farmers, with some warning of a "trade and financial precipice" if tariffs are not addressed. Bloomberg reports indicate that Beijing's substantial soybean reserves, reaching 43.86 million metric tons by 2025 (representing 36% of global stocks), combined with long-term supply agreements from Brazil and Argentina, provide China with significant buffers against immediate supply needs, allowing it to dictate terms. The current situation echoes the trade war under former U.S. President Donald Trump, where agricultural leverage was similarly deployed, causing U.S. soybean farmers to lose billions of dollars in sales.

Agribusiness Profits Under Pressure

The ongoing trade tensions and shifting global supply dynamics are directly impacting major agribusinesses. Companies like Archer-Daniels-Midland (ADM) reported their lowest second-quarter profit in five years in 2025, with full-year adjusted earnings projected to drop to around $4.00 per share, the lowest since 2020. This downturn is attributed to the U.S. trade upheaval and its effect on sales and processing margins. While Bunge Global SA also recorded its lowest second-quarter earnings since 2018 at $1.31 per share, it managed to exceed analyst estimates, partly due to better performance in South America and strategic acquisitions. These companies, along with peers such as Cargill, have faced eroding profits due to abundant global crop supplies and thinning margins, with trade uncertainties adding further volatility.

Outlook: Persistent Headwinds for U.S. Agriculture

Looking ahead, the immediate outlook for U.S. soybean exports to China remains bleak, with renewed demand unlikely until at least early 2026. The USDA forecasts an increase in U.S. ending stocks to 300 million bushels, reflecting the reduced export outlook. While U.S. policies are fostering growth in the soybean oil market, with over 53% of U.S. soybean oil expected to be directed towards biofuels in 2025/26, this shift primarily impacts the oil and meal sectors and does not alleviate the core challenge of diminished whole soybean demand from China. The situation underscores a long-term strategic re-alignment in global agricultural trade, where China's diversification and use of commodities as a bargaining chip will continue to exert significant pressure on U.S. farmers and agricultural exporters.