China Returns to US Soybean Market Amidst Rising Brazilian Prices

Chinese importers have resumed purchasing US soybeans after a lull in activity, as rising prices for Brazilian soybeans make US supplies more attractive, according to a report by Reuters, citing European and US grain traders.

The exact volume of the recent purchases remains unclear, but traders estimate that at least two shipments, each around 65,000 metric tons, were bought for July shipment. One trader indicated that the buyer is believed to be a Chinese state organization purchasing for reserves.

This shift in purchasing patterns comes after a period of declining US soybean sales to China, as the world's top soybean buyer has increasingly favored cheaper supplies from South America.

"The pace of China's buying of U.S. soybeans has slumped this year, as the world's top soybean purchaser has increasingly turned to cheaper supplies from South America," Reuters reports. "The U.S. Department of Agriculture also has not reported any U.S. soybean sales to China for the 2024-2025 marketing year, according to agency data."

However, recent floods in Brazil's key soybean-producing state, Rio Grande do Sul, have disrupted harvests and led to a tightening of supplies. This, in turn, has pushed up export prices for Brazilian soybeans, making US supplies more competitive.

"Brazilian export premiums are firming sharply as their export season goes past its peak, so U.S. soybeans are looking more attractive," one European trader told Reuters. "This is opening a window for the U.S. but the Chinese are still buying in Brazil, though."

Despite the recent purchases from the US, China's soybean imports from Brazil remain strong. Customs data released on Monday showed an 11.7% year-on-year increase in Chinese soybean imports from Brazil in April. However, Chinese soybean imports from the US have declined significantly in the first four months of the year, reflecting the earlier shift towards cheaper South American supplies.

The recent purchases of US soybeans by China suggest a potential shift in the global soybean market dynamics. As Brazilian supplies tighten and prices rise, US soybeans are becoming increasingly competitive, opening up opportunities for US exporters to regain market share.