By Ryan Hanrahan, University of Illinois’ FarmDoc project
Urbana, IL –With just one month remaining in 2025, commodity traders, ag economists and the market appear split on whether China will meet its pledge to buy at least 12 million metric tons of U.S. soybeans by the end of the year. Bloomberg’s Hallie Gu reported that “China is expected to step up US soybean purchases to meet a pledge to buy at least 12 million tons by the end of the year, according to multiple traders, underscoring a wider market hope that — at least in agriculture — a fragile trade truce can hold.”
“State-owned importers including Cofco will take more shipments in the coming weeks, said traders from commercial and state buyers, who asked not to be named as they are not authorized to speak with the media,” Gu reported. “Those volumes will help China fulfill commitments made in late October, they added, though the timing and scale of shipments remains uncertain.”
“After Chinese leader Xi Jinping met US counterpart Donald Trump in South Korea just over a month ago, Washington said Beijing had promised to book at least 12 million tons of soybeans this year,” Gu reported. “That would be followed by additional purchases of at least 25 million tons annually over the next three years, apparently resolving a major point of disagreement. China has not officially confirmed that target, but has moved to reduce tariffs on the crop and lifted import bans on three American exporters.”
“Unless there are political impediments, ‘there would be no reason for them not to at least have made that amount of sales. Whether it’s shipped or not, that’s another thing,’ said Wayne Gordon of UBS Group AG’s wealth management arm,” Gu reported. “The catch is that with only weeks left in the year, time is tight. According to Bloomberg calculations based on USDA data, Chinese buyers have booked roughly 3 million tons — still far short of the target. To meet that goal, they would have to book the remaining volumes over less than a month, and an unpredictable buying pace has stoked concern that China may be hampered by bureaucratic and logistical hurdles, even if it did want to honor its apparent commitment.”
Economists, Market Doubt China Will Meet Soybean Purchase Pledge
AgWeb’s Tyne Morgan reported that “U.S. Secretary of Agriculture Brooke Rollins and the White House have said China will live up to its promise to buy 12 MMT of soybeans this year, but ag economists aren’t so sure. Farm Journal’s November Ag Economists’ Monthly Monitor, an anonymous survey, found more than three-quarters (76%) of economists surveyed say China won’t purchase that amount of soybeans this year; 24% of economists think China will.”
Additionally, Arlan Suderman, chief commodities economist at StoneX said “says the market is assuming something less than the full 12 MMT pledge,” Morgan reported. “‘I think the market has priced in expectations that maybe they’ll take 8 to 10 million metric tons, and they’ll take it during the marketing year between now and the end of August,’ he says.”
“Even if China lifts its 10% retaliatory tariff, as many expect, it still won’t make U.S. soybeans the cheaper option for commercial crushers,” Morgan reported. “‘For the private crushers, what they would have to pay if there were no additional tariff–and there still is a 10% retaliatory tariff–we expect that to come off soon. But even if it comes off, our U.S. soybeans are priced 70 to 80 cents above Brazilian soybeans landed at the port in China,’ (Suderman) says. ‘And so we’re still not competitive from that standpoint. And with new crop harvest just weeks away in Brazil now, we’re probably not going to get competitive. So it’s going to have to be state purchases.'”
China Bans Five Brazil Soy Exporters
Reuters’ Ana Mano reported that “the Brazilian agriculture ministry has been notified by Chinese authorities that five Brazilian soy exporters have been banned from shipping the grain to the Asian country.”
“On Wednesday, Brazilian newspaper Folha de Sao Paulo reported that China had stopped 69,000 metric tons of Brazilian soybeans from entering its territory after finding wheat treated with pesticides in the hold of the ship transporting the cargo,” Mano reported. “‘This is about five facilities, among more than 2,000 authorized to export soybeans to China,’ the ministry said without providing additional details. ‘The case is being addressed as a matter of utmost priority.'”
“According to Folha’s report, exports from two Cargill plants as well as three others controlled by Louis Dreyfus, CHS Agronegocio and 3Tentos TTEN3.SA would be suspended as of Thursday in connection with the incident,” Mano reported.
