China’s Soybean Market Turns South American as US Beans Pile Up

China’s soybean market is undergoing a structural shift: tariffs have pushed US beans out of the country’s import mix, with South American origins capturing share and US farmers facing a mounting stock overhang and income pressure. Price spreads of around 20% against US soybeans have become a powerful driver of trade flows and crush margins. China now relies predominantly on Brazilian and Argentine soybeans, while once-dominant US supplies have effectively disappeared from its import lineup. In September 2025, China imported no US soybeans for the first time since 2018, underscoring how retaliatory tariffs have reshaped trade patterns and price benchmarks. South American origins are enjoying strong demand and robust export programs, while around 15 million tonnes of US beans struggle to find outlets, weighing on producer returns and forward planting decisions.

Prices

Euro‑denominated spot indications highlight the current global price hierarchy. Non‑GMO Ukrainian soybeans CPT Odesa are trading at about EUR 0.40/kg, with FOB levels closer to EUR 0.37/kg, while Chinese yellow soybeans FOB Beijing are around EUR 0.77/kg and organic lots near EUR 0.83/kg. Indian sortex‑clean soybeans FOB New Delhi stand out on the high side at roughly EUR 0.89/kg, and US No. 2 soybeans FOB sit on an intermediate level near EUR 0.65/kg.

Over the past three weeks, Ukrainian prices have been broadly range‑bound around EUR 0.39–0.40/kg with slight softening and a modest rebound, signaling a largely balanced Black Sea market. Chinese domestic FOB values have edged higher by about EUR 0.02–0.03/kg in the same period, indicating resilient local demand and limited relief from cheaper US beans due to tariffs. The net effect is a two‑tier market: competitively priced South American and Black Sea origins dominating global flows to China, while US prices remain uncompetitive despite pressure from burdensome inventories.

Supply & Demand

Market feedback confirms that China’s retaliatory tariffs have sharply eroded the price competitiveness of US soybeans, making them roughly 20% more expensive than South American offerings into Chinese ports. In September 2025, China’s imports from the US fell to zero while overall soybean arrivals hit one of the highest monthly totals on record, driven by Brazilian and Argentine shipments. As a result, US beans have been effectively displaced in the world’s largest demand center.

Brazil and Argentina have rapidly filled the gap. Recent trade data show Brazil supplying more than 60% of China’s soybean imports in early 2026, compared with about 23% from the US and close to 10% from Argentina. With China also drawing heavily on South American origins for soybean meal and oil, the Atlantic supply chain is running near capacity. At the same time, at least 15 million tonnes of US soybeans are reported to be backing up in storage due to blocked access to China, leading to severe logistical strain and even structural failures at some overloaded warehouses.

Chinese demand itself remains firm. Import volumes are high thanks to continued growth in feed and food use, even as the country tactically reshuffles suppliers in response to trade friction. The shift is structural rather than cyclical: new long‑term contracts and infrastructure are reinforcing Brazil and Argentina’s position in the Chinese crushing sector. For global flows, this re‑routing concentrates demand risk in South America and leaves US exporters increasingly dependent on alternative destinations and domestic processing.

Fundamentals & Policy Impact

The central fundamental driver is policy. China’s counter‑tariffs on US soybeans have translated directly into a 20% price disadvantage for US cargoes into China, even before freight and risk premia. This has crushed US price competitiveness despite relatively attractive FOB levels and has sharply reduced farmer incomes in the Midwest, with many producers now operating at or below break‑even. The build‑up of at least 15 million tonnes of unsold stocks is amplifying downward pressure on local basis levels and futures spreads.

In contrast, South American exporters are benefiting from strong Chinese demand and policy tailwinds. Brazilian export volumes to China have been repeatedly hitting or approaching record highs, with China taking roughly 70% of Brazil’s June soybean exports and projected strong intake in July. Argentine beans and products are also gaining share, particularly in coastal Chinese crushing hubs. This redistribution of trade flows is reshaping benchmark differentials, widening the spread between South American and US FOB values into Asia and anchoring Chinese domestic prices more firmly to Brazilian supply conditions.

Weather & Crop Conditions (China Focus)

Weather risks in China’s key soybean belt are moving into focus for the summer. Recent national outlooks point to above‑normal rainfall across Heilongjiang, eastern Inner Mongolia, Jilin and Liaoning during July, with surpluses in parts of Heilongjiang reaching 20–60% above average. Provincial updates from Jilin highlight repeated rainfall zones and elevated flood risk in parts of the northeast.

At the same time, climate studies flag a tendency toward positive temperature anomalies and potential heat episodes over central and eastern China this summer. For soybeans, this combination of heavy precipitation and possible hot spells raises the risk of localized waterlogging, disease pressure and yield variability, particularly on poorly drained fields. While national output is not yet threatened, weather developments in the northeast should be watched closely as they may influence domestic price support and import needs later in the season.

Outlook & Trading Recommendations

Policy uncertainty remains the main upside risk for prices. While there are early signs of China cautiously resuming some US soybean purchases for political reasons, recent reports emphasize that volumes remain far below pre‑trade‑war norms and are unlikely to ease the US stock overhang in the near term. For now, China’s import structure continues to favor Brazil and Argentina, with South American weather and logistics acting as key drivers for global price direction.

• Chinese crushers and feed mills: Continue to prioritize forward coverage from Brazil and Argentina while maintaining a modest diversification into Black Sea and domestic supplies. Use any short‑term dips on South American weather headlines to extend coverage for Q4 2026–Q1 2027.
• US farmers and exporters: Use rallies driven by South American supply scares or macro‑driven fund buying to incrementally hedge or move old‑crop stocks, given the structural loss of Chinese demand and high domestic inventories.
• Importers in Asia ex‑China: Monitor the widening discount of US FOB versus Brazilian beans and consider opportunistic spot or near‑by purchases from the US when freight and tariff structures allow competitive landed prices.

3‑Day Directional Price View (EUR)

• China (domestic FOB, Beijing): Stable to slightly firmer, with weather‑related risk premiums and strong crush margins underpinning yellow soybean prices around EUR 0.77–0.79/kg.
• Black Sea (Ukraine, Odesa CPT/FOB): Broadly steady near EUR 0.39–0.40/kg CPT and EUR 0.36–0.37/kg FOB, reflecting balanced nearby demand and no major logistics shocks.
• US (No. 2, FOB Gulf proxy via Washington D.C. quote): Mild downward bias as ample unsold stocks and weak Chinese demand continue to cap rallies, keeping prices around EUR 0.64–0.66/kg.