China has purchased zero U.S. soybeans in the ongoing marketing year, which began Sept. 1. This eye-opening fact is drawn from new data just released from the U.S. Department of Agriculture. This move follows a meeting on October 30 in Beijing between Chinese officials and then President Trump. Outcomes of the July 31 meeting. During that meeting, China agreed to resume buying U.S. soybeans.
The soybean marketing year usually starts on September 1 and ends on August 31 of the next year. As we enter this period, traders and analysts are watching closely for the pace of export activity, particularly to China, our largest buyer. Specifically, Beijing has pledged to purchase an additional $32 billion in US soybeans. In fact, no American soybeans have been delivered to China since the beginning of the marketing year.
The U.S. Department of Agriculture just laid bare that gulf between the trade deals they promised and what actually materialized in the market. This disconnect is alarming and requires immediate action. American soybean farmers and exporters have been alarmed by the absence of any significant Chinese soybean purchases. Their products’ success is intrinsically tied to the Chinese market.
In the past, China has consistently ranked as the largest or one of the largest importers of U.S. soybeans. This demand largely comes from its robust livestock industry, which requires massive quantities of feed. The annual absence of purchases is costing U.S. farmers dearly this year. It not surprisingly injects historical uncertainty into global soybean markets.
Industry experts have underscored that a number of reasons could be influencing China’s decision to postpone purchasing U.S. soybeans. These factors include shifts in the domestic supply landscape and the evolution of international prices’ competitiveness. With the United States and China’s ongoing geopolitical tensions and trade negotiations stalling, things don’t look so clear.