Traders in the global soybean market expressed doubts after US President Donald Trump said China is considering buying 8 million metric tons more of US soybeans this season, citing uncompetitive US prices.

Trump Feb. 4. took to his social media platform Truth Social to say that he had had a telephone call with Chinese President Xi Jinping. Among other topics, Trump said, they discussed “the consideration by China of the purchase of additional Agricultural products, including lifting the soybean count to 20 million tons for the current season (They have committed to 25 million tons for next season!).”

CBOT soybean futures reacted swiftly to the announcement, with the March (H) futures contract increasing 26.5 cents on that day to 1092.25 cents/bushel, pushing SOYBEX FOB New Orleans for March shipment more than $10/metric ton up day over day. The price followed an upward trend on Feb. 5 and 6.

While sources acknowledged the high volume of contracts traded in the futures market, some noted that high prices make the US uncompetitive with Brazil.

“Personally, I think buying too much would be costly,” a trader in the Chinese market said. “Though a small goodwill purchase might still be possible—just not in large quantities. Apart from political commitments, commercial buying isn’t feasible.”

As of Feb. 6, SOYBEX FOB New Orleans for March shipment sat at $454.98/mt, while FOB Santos March flat price was at $415.31/mt. CFR China soybean month-one March shipment was at $451.86/mt.

While the quality of US soybeans is good, sources say, the significant price gap makes large-scale commercial purchases unfeasible, making Brazilian soybeans a more preferred option.

“The [US] FOB price alone is already around $30/ton higher [than Brazil],” the Chinese trader added. “And freight to China adds another $12–15 per ton. The better quality [of US soybeans] doesn’t make up for that gap.”

Brazilian sources believe that higher prices may not be an obstacle for politically motivated purchases of US soybeans, but that Chinese participants are price-driven.

“Chinese soybean crushers are highly price sensitive because their buying decisions are mainly focused on preserving favorable crush margins,” a Brazilian analyst said. “For state-owned companies that purchase soybeans for reserves, there may be a political or strategic context, so in many cases, higher prices are not an impediment. The goal is to maintain a steady flow of supply, avoid disruptions.”

S&P Global Energy senior analyst Jack Larimer said that Chinese demand would push outright prices up, rendering the US uncompetitive against other origins and sacrificing non-China demand.

“In a worst case, we would see a net loss of around 1 millionj-2 million mt due to the higher prices from Chinese demand and lower Brazilian prices,” Larimer said. “That translates to around 50 million bushels of lost export demand. This could also spill over to lost demand to the rest of the world at the beginning of next season, which provides downside risk to our new crop forecast.”

US traders expressed frustration at the high prices seen in the US market, which make it difficult to operate.

“How can you trade that when every time the soybean market acts like it’s supposed to, the president of the US decides he doesn’t like that and fires off a tweet to save it,” a trader in the CIF New Orleans market said. “The government is currently sitting on the RVO [Renewable Volume Obligation related to biofuels], which is actual sustainable demand for soybeans and would help a lot.”

On Feb. 3, the US Treasury and Internal Revenue Service published their proposed rules for the Clean Fuel Production Credit under Section 45Z and said indirect land-use change emissions from agricultural crops will not be added to their life-cycle carbon scores for fuels produced after Dec. 31, 2025.

The American Soybean Association and the National Oilseed Processors Association said this will effectively double the value of the 45Z tax credit for soy-based biofuels.

While some applauded the update, US sources didn’t seem impressed and highlighted other factors in the equation.

“The implementation [of the tax credit rules] won’t be until the second half of 2026,” a trader in the FOB Gulf market said, “and there are still important doubts because the [renewable volume obligation in biofuels] are not defined yet.”
Source: Platts