China Reduces U.S. Soybean Imports Amid High Inventories

China is expected to reduce soybean imports in the coming months as domestic inventories reach a 15-year high. This decline is driven by weak animal feed demand and negative crush margins, which have pushed benchmark Chicago soybean futures lower.

China is increasingly favoring shipments from Brazil and Argentina over those from the United States. U.S. soybeans remain subject to an additional 10% tariff, rendering them uneconomical compared to South American alternatives. This disadvantage persisted even after a summit between President Donald Trump and President Xi Jinping, as U.S. cargoes were excluded from proposed tariff relief.

While Chinese state-run companies, including COFCO Group and China Grain Reserves Group, purchased approximately 13.7 million metric tons of U.S. soybeans following a May trade deal, private processors are now avoiding U.S. shipments. Recent market indicators show sluggish demand, with bookings hitting a four-year low and poor sales in state-run auctions.