- China purchased approximately 1 million metric tons of soybeans from the U.S. over the course of the week.
- Total purchases are approaching half of the annual commitment of 25 million metric tons.
- Dwindling stocks in Brazil are increasing pressure on the global supply side.
- The additional 10% tariff continues to limit purchases of U.S. soybeans by private processors.
Larger purchases amid tight supply
China purchased approximately 1 million metric tons of soybeans from the United States this week. The total volume of purchases from the U.S. has thus approached half of its annual commitment of 25 million metric tons.
The increase in purchases comes amid an increasingly tight supply situation in the global oilseed market. Stocks in Brazil are declining, limiting the availability of raw materials from one of the world’s most important suppliers.
Tariffs continue to restrict private imports
An additional 10 percent tariff remains in effect in China on goods from the U.S., including agricultural products. In the case of soybeans, the tariff remains a significant barrier for private processors and reduces the appeal of purchasing U.S. soybeans.
A potential reduction in tariffs could increase interest in U.S. soybeans among private buyers as well. With declining stocks in Brazil and rising Chinese purchases, trade conditions between the two largest market participants remain a key factor in the soybean market.
