By Naveen Thukral and Mei Mei Chu, Reuters

SINGAPORE/BEIJING – U.S. soybean exports to China, which have been declining for several years as Brazil builds its dominance in the world’s biggest oilseed market, face a further threat in 2024 as bumper supply from Argentina heightens competition.

The U.S. made up under a quarter of China’s soybean imports last year versus 51% in 2009, according to the United Nations Commodity Trade Statistics Database, as rising Chinese demand has been met with surging production from Brazil and Argentina.

“This year we have large soybean supply coming from Argentina which is going to heat up competition,” said one trader in Singapore at an international company that owns oilseed processing factories in China.

“U.S. share is already shrinking. They are going to lose more to Argentina this year.”

The drop in U.S. soybeans to China could add more pressure on Chicago Board of Trade soybean futures Sv1, which have dropped almost 10% in 2024 after losing some 15% last year.
China is by far the biggest importer of soybeans, which are crushed to make protein-rich meal for fattening animals and oil used in cooking and a range of products. China’s soybean imports have nearly doubled in 15 years to 99.41 million metric tons in 2023, worth $60 billion.

“This year, Brazilian soybean output has declined slightly but Argentina’s production has increased,” said an oilseed trader at a state-owned trading firm in Beijing. “Argentine beans are likely to replace some U.S. beans during the fourth quarter.”

Big crops, competitive prices
Argentina, the No.3 soybean grower after Brazil and the United States, is forecast to produce around 50 million metric tons in 2024, more than double the previous year’s output of 21 million tons, when a historic drought decimated the crop.

Even though Brazil’s output is expected to decline this year, the agricultural powerhouse will have ample supplies to meet demand from its top customer, traders said.

Brazilian crop agency Conab reduced the country’s soybean production to 146.522 million metric tons in the 2023/24 cycle, 5.2% below last year.

Competitive prices offered by Latin American suppliers are driving their rising share of China’s soybean market, traders said, although rivalry between Beijing and Washington is also a factor.

Brazilian soybeans were quoted at $1.30 per bushel premium to November Chicago Board of Trade contract SX24, compared with $2.30 being priced for U.S. beans. Argentina’s June shipment is being offered at $1.45 premium to July SN24.

In March, China’s soybean imports from the United States fell by half from a year earlier.

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