China has secured up to 35 cargos of soybeans from Argentina this week, marking a significant development in global oilseed markets, sources say. The move comes after Argentina made the decision to temporarily suspend its 26 percent soybean export tax. The hiatus, designed to shore up the country’s currency, made Argentine beans nearly three dollars per bushel cheaper than competing origins. Within days, the Argentine government reinstated the export tax, having already brought in seven billion dollars in revenue from the brief window of opportunity. 

For US farmers and traders, the news is sobering. China remains conspicuously absent from the US export market this season. Despite being the world’s largest soybean importer, China has yet to purchase any new crop US soybeans, leaving growers on edge as harvest approaches and market volatility escalates. Market players suggest that these aggressive Chinese purchases from Argentina may have satisfied demand through November, meaning any hopes for a strong Q4 export campaign in the US are diminishing. 

The message from Beijing appears unequivocal. Chinese buyers are signaling they do not intend to take US beans, regardless of price, at least for now. This tactical avoidance has its roots in ongoing trade tensions, including US tariffs on Chinese goods. The grain market’s roller-coaster this week highlights how quickly policy shifts can disrupt established export flows. 

Looking ahead, Brazil will soon enter the mix, with their upcoming soybean crop expected to begin harvest by early January. With large supplies coming online from both South American producers and China’s strategic stockpiling, the US window for meaningful exports has narrowed significantly. Without a breakthrough in trade negotiations that brings China back to the table, the USDA’s current export projection of 1.7 billion bushels may already be on shaky ground, sources say. Some market players anticipate downside risks of another 150 to 200 million bushels in lost business, raising the likelihood of sub-ten dollar soybean futures before year-end. 

In short, China’s calculated move in the Argentine market sends a clear message about its buying intentions and its preparedness to pressure the US. For US soybean farmers, the pressure is mounting to find alternative buyers or accept weaker price prospects as global competition heats up and traditional trading relationships are put to the test. 

Image source: Getty