Large-scale Chinese soybean imports are contingent on trade truce. African swine fever to weigh on China demand through 2019-20. Record South American harvests add to pressure on prices and US farmers.
Chinese soybean purchases will not end US oversupply woes. The US, which is currently on track to have another bumper soybean crop in the 2018-19 season, saw its stocks balloon as China remained on the side-lines during the peak harvesting season. As a result, the US is expected to have nearly 26mn tons of soybeans stockpiled at the end of the current crop season – roughly twice last year’s carryover stocks and from the previous year. Neither Chinese purchases nor increased demand from Europe will suffice to put a dent in US supplies, and this will contribute to a continued bearish outlook for soybean prices.
Soybean prices fell 12% from $9.08 per bushel at time of publication to a cyclical low of $8.03 per bushel on 13 May 2019.