China, the world’s largest oilseed processor, could face tighter soybean supplies towards the end of the year, Reuters reports.
Shipments from South America are approaching their seasonal low, while private Chinese companies are making virtually no purchases of U.S. soybeans because of the existing 10% tariff on agricultural products from the United States.
Market participants hope that talks between China and the United States this month could lead to an easing of trade restrictions. U.S. Trade Representative Jamieson Greer said the two sides plan to make a number of announcements concerning agriculture and non-tariff barriers, but provided no details.
According to AgRadar Consulting founder Johnny Xiang, as the South American season comes to an end, private Chinese crushers will need access to U.S. soybeans. An alternative could be sales from Sinograin’s state reserves.
Crushing Margins Remain Negative
U.S. soybean futures have risen by nearly 12% from their June lows. Prices are being supported by unfavourable weather conditions in the United States, purchases by Chinese state-owned companies and concerns over the possible impact of El Niño on global supply.
Brazilian soybeans for November delivery were offered at a premium of $3.15–3.20 per bushel over the November Chicago Board of Trade contract, including delivery to China. For U.S. soybeans shipped from Gulf ports, the premium was $3.20–3.25 per bushel, excluding tariffs.
Even without the additional 10% tariff, imports of U.S. soybeans for October–January delivery currently do not provide positive crushing margins.
According to Shanghai JC Intelligence, theoretical crushing margins for Brazilian and U.S. soybeans for October–December delivery were negative by 150–230 yuan ($22–34) per tonne.
Shrinking Pig Herd Weakens Feed Demand
The situation in the pig sector is creating additional pressure on crushers. China expects its pig herd to decline in the fourth quarter as the authorities step up measures to reduce oversupply and limit slaughter weights.
This, in turn, is restraining demand for feed and soybean meal.
Importers have already largely completed purchases for October and booked around 4.8 million tonnes of soybeans for November, equivalent to roughly 60% of projected requirements. Purchases for December and January, however, are only just beginning.
Brazilian Soybean Stocks Are Declining
Brazil’s ability to significantly increase shipments to China in the fourth quarter is limited due to strong demand from other buyers and active domestic crushing.
By the end of July, Brazilian farmers had sold around 82% of the 2025/26 soybean crop, compared with 78% a year earlier. According to Safras & Mercado, the share sold may now be approaching 85%.
At the same time, Brazilian soybean shipments to China as of 25 August were 2.6 million tonnes lower than a year earlier, while exports to other countries increased by 6 million tonnes.
Argentina supplied an additional 7.9 million tonnes of soybeans to China in 2025, 92.4% more than in 2024. However, this buffer could be smaller in 2026 due to the absence of similar incentive measures.
Thus, towards the end of the year, Chinese crushers could simultaneously face more expensive raw materials, tighter supply and weaker feed demand, further worsening crushing economics.
PigUA.info, based on materials from thepigsite.com