- Bullish US–China trade: China completed 12 MMT of US soybean purchases and is expected to buy 25 MMT annually through 2028, supporting US export demand.
- Bearish Brazil & Black Sea: Brazilian exports to China are projected to fall 10 MMT YoY to 77 MMT, increasing price competition and pressure on alternative origins, including Black Sea suppliers.
- High-oleic soy advantage: US high-oleic soybean varieties are delivering a 20% reduction in dairy feed additive costs and rapid productivity gains, enhancing US competitiveness via quality differentiation.
US–China Soybean Trade Flow Resumes
Beijing has completed purchases of 12 million tons (MMT) of US soybeans by the end of February, fulfilling its commitment to increase American agricultural imports. State-owned Sinograin, which manages China’s strategic reserves, executed most of these orders following policy moves to lower tariffs and lift supplier restrictions.
The bulk of these shipments are scheduled for first-quarter delivery and will replenish state stockpiles while China auctions existing inventories to free warehouse capacity. This transaction sets the framework for the next phase of the agreement: annual commitments of 25 MMT of US soybeans through 2028, in a market where China routinely imports over 100 MMT of soybeans per year.
Brazilian Export Impact
Brazil’s grain exporters association (ANEC) projects that Brazilian soybean exports to China will decline by 10 MMT year-on-year, from 87 MMT to 77 MMT. This drop is attributed directly to stronger competition from US-origin soybeans under the renewed US–China trade flows.
| Exporter | Soybean Exports to China (MMT) | Period | Change YoY (MMT) |
|---|---|---|---|
| Brazil (Projected) | 77 | Current Year | -10 |
| Brazil (Previous) | 87 | Previous Year | — |
| US to China (Commitment) | 12 | By end-February | n/a |
| US to China (Planned) | 25 | Annually through 2028 | n/a |
High-Oleic Soybean Development in the US
Michigan-based Preston Farms reports strong early performance from high-oleic soybean adoption in dairy feed. Within three days of introducing the new feed, the farm recorded higher milk fat and protein levels, alongside a 20% reduction in monthly feed additive costs.
The farm has planted around 400 acres of high-oleic soybeans in cooperation with Michigan State University. Demand for high-oleic seed in Michigan now exceeds available supply, reflecting keen interest from dairy producers. Michigan’s more than 850 dairy farms collectively contribute approximately $15.7 billion to the state economy, suggesting sizable potential for scale if high-oleic performance trends hold.
Market Analysis: Pressure on Black Sea Origins
The return of large-scale US soybean flows into China, combined with a 25 MMT annual purchase framework through 2028, intensifies competition for global market share. Brazilian exporters are already forecasting significant volume losses to US origin, and this shift is likely to weigh on alternative suppliers, including Black Sea exporters of soybeans and soymeal.
To maintain or grow share in Asia and nearby regional markets, Black Sea suppliers may be forced to compete more aggressively on price. At the same time, the momentum behind US high-oleic varieties introduces a quality and value-added dimension that could further differentiate US supplies from traditional commodity soybeans, complicating the competitive landscape for other origins.
Source: Market Data
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