Soybeans Jump as Trump Urges China to Quadruple US Buying

Mint

3 days ago

US President Donald Trump said he hopes China will massively step up its purchases of American soybeans, even as China has yet to book any cargoes for the upcoming season.
Soybean futures in Chicago jumped as much as 2.8% on Monday, the biggest intraday gain in four months. Corn and wheat also rose.
'China is worried about its shortage of soybeans,' Trump wrote on the Truth Social website. 'I hope China will quickly quadruple its soybean orders. This is also a way of substantially reducing China's Trade Deficit with the USA.'
Trump also thanked Chinese leader Xi Jinping in the post, without saying why.
The president's push comes a day before a trade truce expires, and is happening as US farmers are just weeks from their next harvest, boosting supplies available to sell. China is the world's top buyer of the oilseed and usually ranks as the biggest customer of American soy farmers, a trade valued at more than $12 billion in 2024.
However, US government data as of late July show the Asian nation has refrained from booking any cargoes for the upcoming season that starts in September as tensions between the two sides linger. Soybean futures have been weighed down — touching the lowest level since April last week — on ample global supply and uncertainty over the trade negotiations.
Trump's remarks brought fresh optimism that bilateral trade between China and the US could soon revive, with assets like Chinese equities also rising. Agriculture has been a key issue in the trade dispute, with China turning to crops from South America and elsewhere to meet its needs. But US soybeans have also gotten cheaper than Brazilian cargoes as the influx of fresh supply nears.
Still, some questioned whether Trump's post would spur purchases of US soybeans from China, particularly without a trade deal in place.
'We don't see China buying US soybeans under the current tariff structure, but can't rule out good faith buying if a US/China trade deal gets done,' Terry Reilly, a Marex Group PLC. analyst, wrote in an note.
At the same time, Trump's moves to boost US biofuels production could provide a significant domestic outlet for locally grown crops, limiting the amount of crops available for any shipments to China.
AgResource Co. said Trump appeared to be challenging China and Xi, but was skeptical about the chances of success. 'ARC has our doubts that such a tactic will be successful, but it may offer a pathway for the Trump administration to extend existing tariffs for another 90 days,' it wrote in a note.
Beijing faces an Aug. 12 deadline before its tariff truce with the US expires, though the Trump administration has signaled that is likely to be extended.
Soybeans are a key element of the China's diet and livestock feed. The country has stepped up purchases of soybeans from its top supplier Brazil in recent months, and is also testing trial cargoes of soybean meal from Argentina, to secure supplies of the animal feed ingredient.
This is typically the time of year when China's purchases begin shifting to the Northern Hemisphere. Analysts surveyed by Bloomberg expect the US Department of Agriculture to boost its outlook for the domestic harvest in a report due Tuesday.
But despite Trump's comments, there is little sign that China is concerned about a soybean shortage, said Vitor Pistoia, senior grains and oilseeds analyst at Rabobank. If trade relations don't improve, the nation would be able to source its annual supply entirely from South America if necessary, bypassing the US, he said.
'When you add what Brazil has, what Argentina has,' with what Uruguay and Paraguay have, 'all those guys have enough to supply China,' he said in an interview.
While China and the US have been trying to work out a trade deal, other issues have been complicating their relationship. Last week, China defended its imports of Russian oil, pushing back against US threats of new tariffs after Washington slapped secondary levies on India for buying energy from Moscow.
And on Sunday, a social media account affiliated with state-run China Central Television that regularly signals Beijing's thinking about trade slammed an Nvidia Corp. chip's supposed security vulnerabilities and inefficiency. In July, the Trump administration reversed course to allow Nvidia to sell the H20 AI accelerator to China.
With assistance from Pyotr Kozlov.