China’s First Purchase of US Soybeans
China has made its first purchase of U.S. soybeans for the 2024-2025 marketing year. The country booked 132,000 metric tons of soybeans, marking a delayed start to sales this season. This move occurs as China continues to rely heavily on affordable commodities from Brazil. Notably, the first U.S. soybean purchase for last year’s marketing season happened in January 2023, which indicates a shift in purchasing patterns.
Comparison with South American Suppliers
In recent months, China has increased its purchases of soybeans from South America, especially Brazil and Argentina. This shift is largely due to robust harvests and favorable currency devaluation in these regions, which have kept prices low. Between last August and June 2024, U.S. soybean exports to China declined by more than 20%. These competitive prices make South American supplies more attractive to Chinese buyers.
US Market Dynamics and Future Outlook
Despite recent challenges, the U.S. soybean market remains resilient. The Agriculture Department highlights that global buyers are finding U.S. soybeans increasingly appealing due to robust supply and declining prices. However, sales could remain under pressure post-harvest because of strong competition from South America. The USDA has projected U.S. season-average farm prices for soybeans to decrease to $11.10 per bushel, a modest drop from previous levels.
Potential Shifts in Soybean Meal Market
While soybean exports face stiff competition, the U.S. has experienced some positive momentum in soybean meal sales. Mexico’s imports are projected to reach the second-highest total ever this season, recovering from a nine-year low in the 2022-2023 marketing year. Additionally, adverse weather conditions in Argentina, the largest exporter of soybean meal, could provide a competitive edge for U.S. exporters. Nonetheless, global prices are expected to remain competitive due to bumper crops from Brazil.
