Tariffs Limit Larger China Purchases of US Soybeans, Market Sources Say

Freight News, 28/07/2026

While reports of China’s activity in the US soybean market continue, global market participants say remaining tariff barriers are limiting more substantial purchases, with Brazil still the primary supplier. The buying interest matters because it comes against a backdrop of a still-active but uneven trade flow: even as US sales to China have resumed in part, commercial buyers appear to be weighing tariff costs against origin economics and logistics.

According to S&P Global Energy CERA, through July 20 the USDA had confirmed 1.996 million mt of US soybeans sold to China this year, below the target announced by US officials in October: 25 million mt per year until 2028. Unconfirmed trades were also heard during the week beginning July 6.

“I now believe buying activity is fully underway,” a trader in the FOB Gulf market said. “But tariffs are in the way.”

Those purchases, along with weather-related support, lifted Chicago Board of Trade soybean futures on July 20. The August (Q) soybean futures contract rose 21.5 cents day over day to 1226 cents/bushel, while the November (X) contract gained 23.25 cents to 1226.25 cents/bu.

Chinese traders said additional demand for US soybeans is likely to remain limited unless tariffs are reduced. Chinese tariffs on US soybeans currently stand at 13%.

“Without tariff relief, demand is mainly coming from state-owned buyers,” a Chinese trader said. “While most commercial buyers are unable to purchase US soybeans.”

Aaron Gerdts, crop principal analyst at S&P Global Energy CERA, said that while some “expect tariffs to be dropped, it hasn’t happened yet.”

US President Donald Trump and Chinese President Xi Jinping are reportedly planning a meeting in September, Secretary of State Marco Rubio told reporters on July 19, though sources expressed doubt about the outcome of the potential summit.

“I have no idea if tariffs will be sorted [during that meeting],” the trader in the FOB Gulf market said.

Even without US soybeans, supply in China is unlikely to become tight over the rest of the year because of abundant Brazilian supplies. That underscores why the tariff issue is being watched closely in the market: US sales can rise without necessarily displacing Brazil unless the price gap narrows enough for commercial cargoes to compete.

A second Chinese trader said demand for Argentine soybeans is also likely to emerge, as Argentine-origin soybeans are cheaper than competing origins.

Platts, part of S&P Global Energy, assessed SOYBEX FOB New Orleans for September shipment at $495.40/metric ton on July 20, while the outright price for CIF New Orleans for July shipment was $494.20/mt. CFR China soybean month-one September shipment rose $7.62/metric ton day over day to $535.54/mt, and FOB Santos for September shipment was assessed at $491.84/mt.

Another Chinese soybean trader said Brazilian soybeans are expected to remain the preferred origin for Chinese commercial buyers despite the recent increase in US soybean purchases.

“After all, Brazilian soybeans still offer better value than US-origin soybeans,” the trader said.

Brazilian basis premiums for CFR China are likely to remain firm, although a further rally in futures could ease basis levels somewhat, the same trader said, adding that CFR China flat prices are expected to remain supported overall.

Buying interest is also expected to focus on Brazilian new-crop cargoes, supported by more favorable crush margins than old-crop soybeans, according to another trader.

Firm overseas demand, together with rising futures, has supported Brazilian prices and kept port differentials firm despite a record domestic crop. On July 15, Platts assessed SOYBEX FOB Santos for August loading at $483.66/mt, the highest level for a spot shipment since Dec. 29, 2023. The Brazilian soybean assessment has risen nearly 20% so far in 2026.

“In my view, soybean prices in Brazil should decline,” a Brazilian trader said. “There will need to be some adjustments with China buying from the US.”

“The winter corn harvest will start coming in soon, so market participants will become more focused on corn. I don’t see a reason for soybeans to remain expensive,” the source added, noting as well that there are still many “question marks” surrounding Brazil’s 2026-27 new crop, which will begin to be planted in September.

Source: Platts