China Pauses Soybean Purchases as Brazilian Premiums Soar

China has halted major soybean purchases for year-end delivery. The pause comes as high premiums for Brazilian cargoes squeeze crusher margins. This situation could force Beijing to dip into state reserves.

According to trade sources, Chinese buyers have secured supplies only through November. They now need 8 to 9 million metric tons for December and January shipment. Uncertainty over U.S.-China trade talks further complicates the supply chain.

High Brazilian Costs Squeeze Importers

Brazilian soybean premiums are currently high. They sit at $2.8 to $2.9 per bushel over the Chicago benchmark. U.S. premiums are significantly lower at around $1.7 per bushel.

This price gap makes Brazilian beans unattractive for Chinese crushers. Their profit margins have been negative for months. A Shanghai-based trader confirmed crushers have little incentive to buy at these levels.

Potential Reliance on State Reserves and Future Harvests

The supply gap may lead to an unusual solution. Traders suggest China might use its own strategic reserves. This would cover needs until the new South American harvest arrives.

Brazil is expecting a record soybean harvest in early 2026. Crop agency Conab forecasts 177.64 million metric tons. New crop shipments could begin by the end of January, offering price relief.

U.S. Beans Remain a Possibility Amid Trade Tensions

Chinese buyers have not completely ruled out U.S. soybeans. Purchases could resume if the two governments reach a trade agreement. Analysts note U.S. prices are more attractive than current South American offers.

Trade tensions continue to impact the market. Recent statements from Washington have accused China of avoiding U.S. purchases. Data from Reuters shows China’s reliance on U.S. beans has fallen significantly since 2016.

The situation highlights China’s delicate balancing act in securing vital food resources. Global soybean markets are watching closely for any shift in Chinese strategy. The coming weeks will be critical for determining supply routes for the world’s largest soybean importer.

Info at your fingertips

Why are Brazilian soybean premiums so high?

Strong global demand and limited immediate supply have driven up costs. Brazilian premiums are nearly double those of U.S. beans.

When is Brazil’s next soybean harvest?

Brazil’s new record harvest is expected in early 2026. Shipments could start arriving by the end of January.

Could China still buy U.S. soybeans?

Yes, Chinese buyers may turn to U.S. supplies if a trade agreement is reached. U.S. beans remain more competitively priced.

How much soybean does China need?

China still needs to purchase about 8 to 9 million metric tons for December and January delivery. This follows recent large purchases from Argentina.

What happens if no purchases are made?

China would likely tap its state reserves to meet domestic demand. This would be a temporary measure until new harvests arrive.