US soybean futures have dropped to a four-week low, falling below $12.90 per bushel, due to ongoing uncertainty regarding Chinese demand. While a new "30-for-30" US-China trade framework aims to reduce tariffs on $60 billion in goods for each nation, benefiting about 30% of US exports to China, soybeans were notably excluded from these tariff cuts. This means US soybeans continue to face an additional 10% tariff, primarily impacting private Chinese buyers and keeping soybean trade largely within state-owned enterprises.
Despite this exclusion, Chinese state-owned buyers have already purchased over 12 million metric tons of US soybeans, moving towards an annual commitment of 25 million metric tons from 2026 through 2028. However, the lack of new purchase incentives for private Chinese crushers, combined with the fulfillment of existing commitments, does not necessarily indicate a significant increase in demand beyond current expectations. Analysts suggest that China's decision to keep soybeans subject to tariffs serves as a bargaining chip for future negotiations, maintaining leverage.
The American Soybean Association expressed disappointment over the exclusion, emphasizing that removing the tariff would enhance the competitiveness of US soybeans and open more opportunities for private Chinese buyers. The trade agreement, while improving the longer-term demand outlook for products like corn, wheat, soybean meal, and soybean oil, places the largest US agricultural export to China—soybeans—on a separate, politically managed path. This situation has led to a skeptical initial market reaction, with grain futures, including soybeans, declining as traders await clearer evidence of increased demand.
