US soybean prices hit 3-month high, but experts expect exports to decline

July soybean futures in Chicago rose to a 3-month high of $397.9/t (+4.1% for the week) on Tuesday after the introduction of a bill to extend the US biofuel tax credit until December 2031, which will stimulate domestic demand for soybeans.

 

Prices were also supported by an agreement between the US and China to temporarily reduce mutual tariffs, and Trump's statement about his possible meeting with Xi Jinping to sign a trade agreement.

 

But consulting company AgResource warned that if the countries cannot reach an agreement, US soybean exports will decrease by 20% from 50.76 to 40.8 million tons, corn by 13% to 60.96 million tons, and prices for farmers will drop sharply.

 

Experts believe that a temporary reduction in tariffs will not help the US resume soybean exports to China, as even such tariffs make American soybeans uncompetitive.

 

It is important that a trade deal between the US and China is concluded by the end of the summer, when the harvest is complete, otherwise low export forecasts will become a reality, reducing farmers' profits.

 

Analysts predict that soybean futures on the SWOT exchange in Chicago will fall to $330/t, but if a deal is concluded, they will rise to $478/t (which is unlikely).

 

However, American farmers believe that a temporary reduction in tariffs will not help them, as Brazil, which has become the largest supplier of soybeans to China, has harvested a record soybean crop, has significant stocks, lower prices, and no tariffs from China.

 

China, which is the world's largest importer of agricultural products, buys almost 70% of its imported soybeans from Brazil.

 

Recall that according to the USDA forecast, in the 2025/26 MY, China will increase soybean imports compared to the current season from 108 to 112 million tons.