China’s Soybean ‘Glut’ Raises Questions Over U.S. Trade Deal

A Reuters report shows China has a soybean “glut,” finding stockpiles at Chinese ports are at record levels, with crushers there holding the most supplies since 2017.

NASHVILLE, TENN. (RFD-TV) — China is expected to buy more than 75 million metric tons of soybeans over the next several years, but that could all be in jeopardy, as supplies there are already running heavy.

A new Reuters report shows that China now has a soybean “glut.” They found stockpiles at Chinese ports are at record levels right now, and crushers there are holding the most supplies since 2017.

Reports show that state inventories in China currently have enough soybean supplies to meet demand for about five months.

According to White House trade officials, China pledged to buy 12 million metric tons of U.S. soybeans before the year is up, but no concrete plans have been announced.

While that soybean trade framework is in place, Ohio farmer Chris Gibbs tells us he will believe it when he sees it. Gibbs’ farm was one of the stops along the “Motorcade for Trade,” the coast-to-coast event hosted by the group Farmers for Free Trade.

“I don’t think I want to elevate it to deal right at the moment,” Gibbs said. “What we’ve got here are agreements to talk about a framework that were maybe sealed with a handshake. If we had had a trade deal, the President would have opened up one of those black binders, and his signature would have been on it. And so, I haven’t seen any ink yet. So, until I see ink — particularly out of China — I’m dubious about calling it a trade deal.”

Among the many problems facing farmers today, Gibbs said, trade has been his top issue since tensions with China began in 2018.

Ahead of the Trump-Xi meeting last month, China did buy some U.S. soybeans — about three cargo loads worth — and has since resumed purchases of some U.S. grains, including sorghum and wheat. However, in recent years, Brazil (and more recently, Argentina) has become its primary soybean supplier.

This week, both the U.S. and China dropped retaliatory port fees and reduced tariffs on many U.S. agricultural goods by 10 percent. Still, with a 13 percent tariff on U.S. soybeans to China (down from 23%), Brazil offers a better bargain in the international market.

“It still does leave Brazil as the dominant exporter on the grain side, certainly for China,” said Rich Nelson, a commodity broker at Allendale Inc., “Keep in mind, as far as pricing, if we are kind of including this 23% tariff, which still applies to U.S. products, Brazil is still a cheaper supplier right now. So, China will still buy a little bit from the U.S., but they’ll still lean on Brazil as the dominant supplier in these next few years ahead.”

According to Nelson, previously, traders believed that China faced a soybean shortfall between December and February and would rebuild government stocks. If the recent Reuters report holds, that might not be the case.

Related Stories
Lewis Williamson with HTS Commodities shares an update on post-WASDE grain movement, with corn leading export momentum, soybeans steady, and wheat and sorghum continuing to move selectively.
New SDRP funding and expanded loss programs give producers additional tools to rebuild cash flow and stabilize operations after two years of severe weather losses.
China still has a long way to go before it meets its commitment to buy 12 million metric tons of U.S. soybeans this year.
The new WOTUS proposal narrows federal jurisdiction, restores key agricultural exclusions, and gives farmers clearer permitting rules after years of regulatory uncertainty.
Ethanol markets remain mixed — weaker production and blend rates are being partially balanced by stronger exports as winter demand patterns take shape.
Tariff relief may soften grocery prices, but it also intensifies competition for U.S. fruit, vegetable, and beef producers as cheaper imports regain market share.

LATEST STORIES BY THIS AUTHOR:

Farm Bureau Economist Faith Parum discusses key outcomes from the U.S.-China trade agreement and the benefits of expanding trade across Southeast Asia.
Farm CPA Paul Neiffer joined us on Thursday’s Market Day Report to discuss the implications for farmers.
Chris Bliley with Growth Energy discusses ongoing concerns about U.S. ethanol exports and the expansion of market access promised under the Phase One deal between the U.S. and China.
“It does not extinguish right away here — in any sort of sense — the real profitability concerns and people’s ability to pay bills and get to the other side of this in the very short term. This is where the skepticism builds.”
RFD-TV tax expert Roger McEowen discusses the renewed tax provision and how cattle producers can take advantage of it to recover investments in heifer retention and herd expansion more quickly.
U.S. Senator Roger Marshall (R-KS) shares his perspective on the U.S.-China trade developments and their potential impact on American producers, farmers, and ranchers.