USDA lowers US soya export forecast after China rejects American shipments

U.S. Department of Agriculture reduced its estimate of U.S. soybeans exports for the current crop year on Friday, after China, which is the top soy buyer in the world, shunned American shipments and favored South American products in its trade dispute with Washington.

USDA forecasts exports of 1.635 billion bushels in 2025/26 marketing year (Sept/Aug), down 50 million bushels compared to its September estimate. This represents a 13% drop from the previous season. USDA data shows that export sales were down 36% compared to the same period a year ago due to lack of Chinese demand.

The USDA released daily data on large export sales during the U.S. shutdown. This included 1.348 million tons of U.S. soya beans sold between October 2 and November 12. Of these, 332,000 tons were confirmed to have been sold to China.

Prices for soybeans fell to their lowest levels in five years this fall due to a slump in U.S. export demand. However, hopes of a breakthrough in U.S. China trade negotiations sparked a sharp rally by mid-October. This gave farmers an opportunity to sell the harvest at its highest price for this season. Growing soybeans had brought farmers negative returns all year.

U.S. Treasury Sec. Scott Bessent, and Agriculture Sec. Brooke Rollins said that China had promised to resume U.S. purchases of soy and purchase 12 million metric tonnes of the oilseed in this year following a meeting held between Chinese President Xi Jinping and President Donald Trump at the end October. China is yet to confirm the agreement reached in the two-week-old talks and has only purchased minimal quantities so far.

The USDA predicted that Chinese purchases will accelerate. However, it acknowledged that lower-cost South American supplies are undermining demand for American soybeans following the steep rise in U.S. soy prices since mid October.

Since the last report the U.S. has entered into a trade agreement with China which resulted in higher U.S. export prices and a narrower price gap between the U.S. The USDA stated that while U.S. exports of soybeans to China are expected to increase for the remainder of the marketing season, this could be offset by lower shipments to other markets.

Benchmark Chicago Board of Trade Soybean futures continued to lose ground on Friday following the USDA release, with prices trading at about $11.31 per bushel near midday.

What was striking is that the USDA did not change its export or crush numbers for soybeans. Arlan Suderman is chief commodities economist for StoneX. He said that the only adjustment was a change in production. "The market built up bullish expectations and we are seeing that those hopes were not there, so it is taking profits on this rally."

(source: Reuters)