Soybean prices have rebounded to a 16-month high after relations between the US and China thawed, but the outlook for the oilseed remains uncertain, analysts say.
Currently, soybeans futures are ruling at $11.38 a bushel (about $380 a tonne) on the Chicago Board of Trade. Soybean prices have witnessed a sharp spike compared to wheat and corn between October 13 and November 11, buoyed by the thaw in Sino-US relations.
Soybean futures rebounded after China announced it would restore export eligibility for three US firms starting November 10, said the Trading Economics website. Prices have fluctuated since then following a slew of development after the truce.
Actual volumes unclear
“During the China International Import Expo, Beijing signed several agricultural purchase agreements, including soybeans, though actual purchase volumes remain unclear. Despite the positive signals, US soybeans still face a 13 per cent tariff, compared with 3 per cent for Brazilian and Argentine supplies, limiting US price competitiveness,” it said.
Research agency BMI, a unit of Fitch Solutions, said given the weak financial environment of the sector, it sees little scope for more expensive US soybeans to regain significant market share in China’s commercial sector.
Between October 31 and November 11, US soybeans reversed from a $17.6/tonne discount to a $6.1 premium over Brazilian supplies, effectively pricing American farmers out of markets.
“Should market confidence in the purported US-China agreement begin to wane, we would expect this premium to erode. Nevertheless, in the short term, if the volumes mentioned by the US fail to materialise, the most significant impact may ultimately be that Washington’s trade announcement has temporarily reduced US export competitiveness in the very markets outside of China,” the research agency said.
Narrow price spread
The US Department of Agriculture (USDA) said in its World Agriculture Supply and Demand Estimate (WASDE) report that the Sino-US deal had pushed up US soybean prices and narrowed the price spread between US and other major exporters.
“While US soybean exports are expected to rise to China for the rest of the marketing year, these higher shipments could be offset by reductions to other markets where the US no longer holds a large price discount compared to other exporters,” it said.
On October 29, China made its first US soybean purchase of the 2025-26 season (September 2025-August 2026), followed by US Treasury Secretary Scott Bessent’s declaration that China had committed to buy 12 million tonnes (mt) of US soybeans during the remainder of 2025 and 25 mt tonnes per year between 2026 and 2028.
The US exported an estimated 6.9 mt of soybeans to China up to September 18, apart from an additional 180,000 tonnes on October 29. The agreed 12 mt of exports before the year-end will result in year-end export volumes to China totaling 18.9 mt, representing a year-on-year decline of 30.2 per cent and the lowest level since 2018, said BMI.
No deals after Oct 29
The USDA said US soybean exports are forecast at 44.60 mt due to lower supplies and higher exports by Brazil and Argentina. “In September, Argentina temporarily reduced export taxes leading to an influx of export registrations during the peak US export season,” it said.
On the other hand, BMI said the 25 mt per year reportedly agreed to for 2026-2028 would still reflect volumes below pre-tariff levels, 7.6 per cent lower than that exported to China by the US in 2024, and omitting 2025, representing the lowest annual trade volumes since 2019, the research agency said.
However, no shipments have been signed after the October 29 announcement.
If realised, US demand would support a higher price floor in 2026 compared with 2025 levels. “We moderate this view by noting these volumes continue to reflect weak demand by historical standards,” said BMI.
However, the research agency said it was “deeply sceptical” that the reported US-China soybean purchase agreement will materialise into the volumes declared by the US. “As of November 12, these commitments have only been announced by the US side, with no official confirmation from China,” it said.
Economic burden
Though US soybeans have historically commanded premiums due to higher oil content and superior storage characteristics, the 10 percentage points tariff gap is wide to overcome commercially, said BMI. So, Chinese purchases will likely be limited to strategic state reserve building rather than commercial demand.
The continued momentum in Brazilian soybean prices has recently outpaced gains in China’s domestic output markets. This has driven crushing margins into a negative territory at $10.0/tonne. “We believe these weak margins will moderate overall Chinese soybean demand in the near term until raw soybean costs ease,” the research agency said.
The rising challenges faced by Chinese soy crushers illustrate the risks associated with China’s increased dependence on Brazil. “Ultimately, while the market views Brazil as largely capable of covering US soybean volumes, the economic burden placed on China’s domestic crushing sector represents the more significant long-term risk,” said BMI. .
Meanwhile, the Food and Agriculture Organisation’s Agricultural Marketing Information System (AMIS) has raised soybean production estimates to 431.4 mt, up from 429.6 last season. It has pegged supplies 7 mt higher than last year at 502.2 mt, while projecting utilisation at 429.1 mt. Global trade will likely rise a tad to 183.8 mt (182.9 mt last season), but ending stocks will be marginally lower at 70.7 mt (70.9 mt).