China's commercial buyers have dramatically scaled back orders from Brazil, with purchases in the past two weeks dropping below five cargoes versus roughly 20 per week in August, according to traders who asked not to be named. Private processors leaned hard on Brazilian beans after last season's US-China tensions, and many stayed away from US supplies given steep tariffs. The catch now is simple: at current prices, that Brazil-first strategy no longer pencils out.
Crushers are in the red on Brazilian shipments, the traders said. Consultancy Mysteel estimates losses of about 150 yuan per ton on November-loading soybeans from Brazil and roughly 470 yuan on December cargoes. For context, 150 yuan is about $22.3.
Analysts at brokerage Stag International say Brazil has lost the cost edge it enjoyed during recent US harvests: November cargoes at Paranagua commanded a $1.35 per bushel premium to Chicago futures and even topped US Gulf offers. Tighter availability in Brazil after a selling burst during August's Chicago rally is also pushing prices higher. AgRural pegs sales of the old crop at over 91%, exceeding the five-year average of 88%, and analyst Daniele Siqueira says many farmers are hanging on to what is left in hopes of better prices.
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Buyers are also waiting to see what, if anything, comes out of the meeting between US President Donald Trump and China's Xi Jinping. Washington and Beijing have been discussing tariff reductions on selected products, including American agricultural goods. Traders are watching closely to see if the extra 10% tariff on US soybeans gets lifted in talks in Washington, which would make US supplies more appealing to China's commercial crushers.
Meanwhile, state-owned companies have already ramped up US soybean purchases as Beijing pursues its pledge to purchase at least 25 million tons each year through 2028. Sales moved past the midpoint earlier this month, and the US Department of Agriculture reported a 120,000-ton sale to China on Thursday.
Short term, Brazil's tighter old-crop stocks and a firmer premium collide with softer Chinese crushing margins. At the same time, the US harvest is ramping up, and US beans typically play a bigger role globally in the fourth quarter. For anyone watching food inflation or commodity-linked plays, the near-term hinge is policy: any move on that 10% US soybean levy could quickly redirect flows, prices and margins. Keep an eye on where state buyers point their next tenders and how quickly private crushers re-enter the market if tariffs shift.
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