China holds off on soybean purchases due to high Brazil premiums, traders say

BEIJING: China has yet to secure much of its soybean supply for December and January as high premiums for Brazilian cargoes discourage buyers, a development that could prompt Beijing to tap state reserves to meet near-term needs, three trade sources said.

AI Brief

China still needs 89 million tons of soybeans for year-end but is avoiding US and Brazilian sources due to cost and politics.
High premiums and poor crush margins are discouraging purchases, so China may tap reserves until Brazil's 2026 harvest begins.
A potential Trump-Xi meeting could revive US soybean sales, but China's reliance on US soybeans has dropped sharply since 2016.

China still needs to purchase about 8–9 million metric tons of soybeans for December-January shipment after covering cargoes through November with hefty purchases of Argentine beans in recent weeks, the sources said. Escalating Washington-Beijing trade tensions continue to shut out U.S. supplies.

"China is not buying U.S. beans because of the trade war and Brazilian beans are too expensive," said one oilseed trader at an international trading company which supplies agricultural products to China.

"China might end up using its own reserves for the year-end and early next year, before the new South American harvest comes in." he said.

BRAZILIAN SOYBEAN PREMIUMS

Brazilian soybean premiums are holding at US$2.8-2.9 per bushel over the November Chicago soybean contract SX25 compared with U.S. premiums at around US$1.7 per bushel.

Crush margins have been in negative territory CNSOY-RZO-MRG for most of the second half of the year.

Crushers have little motivation to secure December-January soybean cargoes as supplies from Brazil have squeezed their margins, said a Shanghai-based trader.

Chinese buyers are hoping that an early and record soybean harvest in Brazil in early 2026 will help ease prices.

Brazilian farmers are expected to harvest a record 177.64 million metric tons of soybeans in the 2025/26 season, around 6 million tons more than the previous year, crop agency Conab said.

"We think new crop shipments from Brazil can start at end of January," said a second oilseed trader. Sources declined to be named as they were not authorised to speak to media.

U.S.-CHINA SOYBEAN TALKS

Chinese buyers have also not yet entirely written off U.S. supplies, with oilseed processors likely to make purchases for December-January if there is a trade agreement between the two governments, traders and analysts said.

"If a deal goes through, Chinese buyers will likely turn to U.S. beans for the two-month window, with prices more attractive than South American offers," said Johnny Xiang, founder of Beijing-based AgRadar Consulting.

Soybeans are expected to feature on the agenda for a potential meeting between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea. Beijing has, however, yet to publicly confirm the talks.

On Tuesday, Trump accused China of "purposefully" avoiding U.S. soybean purchases, calling it an "economically hostile act" that has "caused difficulties" for American soybean farmers.

Since the first Trump administration, China has diversified its soybean imports. In 2024, China bought roughly 20% of its soybeans from the U.S., down from 41% in 2016, customs data shows.