President Trump’s statement on Feb. 4 that China was considering buying another 8 million metric tons (294 million bushels) of U.S. soybeans for 2025/26 delivery sent soybean futures soaring again, just as the promise of Chinese buying caused prices to spike last fall. The market’s reaction this time was even more intense, with futures trading volume hitting near-record levels. The potential added demand from China is very welcome, but we need to take a step back from the market’s initial excitement and take a more measured look at what this may mean for U.S. soybean exports.
First off, we must note total U.S. soybean export sales and shipments, despite getting a boost from recent Chinese purchases, remain well behind pace to meet USDA’s export forecast of 1.575 billion bushels and are also a bit behind pace to meet our lower forecast of 1.525 billion. Additional U.S. export shipments of 728 million bushels are needed to reach USDA’s forecast, but over the past five years, shipments from now through Aug. 30 have averaged just 552 million, as shown at right.
It seems clear that even though USDA’s estimated U.S. soybean carryover is currently relatively comfortable at 350 million bushels and ours is more comfortable at 370 million, the U.S. can’t just ship another 294 million bushels to China, without losing sales to other destinations. USDA said as much in Tuesday’s WASDE report. USDA noted China “is reported to be considering” buying more U.S. soybeans, but also said estimated global soybean import demand was nearly unchanged from January, “so therefore if China bought more from the United States, global soybean exports will likely be shifted with more U.S. shipments to China and less to other markets”.
Using USDA numbers, an increase of 294 million bushels in exports to China without any decrease in exports elsewhere or the U.S. crush, would drop U.S. ending stocks to an extremely tight 56 million bushels and the ending stocks/use ratio to a record low 2.4%. The U.S. soybean carryout has fallen as low as 90 million bushels in 2013 with an ending stocks/use ratio of 1.3%, but that isn’t going to happen. With world supplies very comfortable — stiff competition from big South American supplies will ensure that.
There is reason to doubt China will buy any more U.S. soybeans in 2025/26, with U.S. beans far from price competitive against new-crop Brazilian beans. China usually buys few U.S. beans after January/February. In the last 5 years, March-August sales to China averaged just 59 million bushels. But added Chinese buying of U.S. beans will be political in nature, a goodwill gesture ahead of President Trump’s expected visit to Beijing, not demand driven.
