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Private traders sit out, testing China pledge on soybeans
Xi-Trump talks in September will review progress on trade truce
(Daniel Acker/Bloomberg)
Key Takeaways:
- China accelerated U.S. soybean purchases before a planned September Xi-Trump summit, with state-owned traders leading buying under the countries’ trade truce.
- Private Chinese importers remain largely sidelined because tariffs and strained ties make U.S. soybeans uneconomic, complicating a 25 million-ton annual target.
- The Xi-Trump talks next month will review trade-truce progress as traders warn limited state capacity and delayed private buying could tighten supplies later.
China’s drive to buy large volumes of U.S. soybeans — a commitment under last year’s trade truce — risks being complicated by a lack of participation from the country’s private traders.
Purchases of soybeans have accelerated in recent weeks, ahead of an expected September summit between President Xi Jinping and President Donald Trump. But the buying splurge is being spearheaded by China’s giant state-owned agricultural traders, with the private sector largely sitting on the sidelines because the trade isn’t commercially viable.
China’s pledge to buy U.S. agricultural products including soybeans was a key plank of the trade truce struck by Xi and Trump in October to end an escalating dispute threatening the world’s top two economies. Progress on that agreement will be reviewed at their planned talks in Washington next month.
While the lack of private participation in soybean purchasing doesn’t mean China can’t meet a 25-million-ton annual target outlined by the White House, it makes for a trickier task given limited storage and crushing capacity in the state supply chain, traders said.
Private crushers are largely waiting and playing by ear, and soybean meal supplies could tighten up domestically in the fourth quarter if more U.S. soybean supplies aren’t readily available, said Liu Haowen, analyst with Wuchan Zhongda Futures Co. Ltd.
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Cofco and Sinograin alone completed the initial goal of buying 12 million tons of U.S. beans made at Trump and Xi’s 2025 summit. Calls to both companies were not answered.
Chinese President Xi Jinping and U.S. President Donald Trump at the Zhongnanhai Garden in Beijing on May 15. (Evan Vucci/Pool Photo via Associated Press)
State-owned Chinese firms booked another flurry of U.S. soybean cargoes last week, bringing total purchases for the 2026-27 season to about 6 million tons. That’s about a quarter of the 25 million tons the White House said China will buy annually through 2028. Beijing never publicly affirmed specific targets.
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The private importers typically start booking American shipments in significant volumes from August as the harvest approaches, but higher import tariffs still in place on U.S. products — and fragile China-U.S. ties — means the trade isn’t attractive.
At the same time, shipments from Brazil are getting more expensive. Commercial crushers in China have left their demand for November to January largely open, as margins for Brazilian beans go into negative territory, traders said.
Any immediate supply shock would be cushioned by China’s ample inventories of soybeans and soybean meal, Wuchang Zhongda’s Liu said. But that buffer may not last long, and the window to secure additional supplies is narrowing.
