Views: 2 Author: Site Editor Publish Time: 2018-07-17 Origin: Site
Since the beginning of trade war between China and the US, the US soybean and plant support net exports will be down a quarter-billion bushels in the coming year due to steep Chinese tariffs on the oilseed. Meanwhile China recently imposed on U.S. soybeans is expected to cause higher prices for soybeans in China. Chinese soybean imports were forecast to fall by 8% during the 2018/19 marketing year despite larger shipments from Brazil, already the world’s largest soybean exporter. And Chinese consumers will see a smaller supply of soy oil, their preferred vegetable oil for cooking and processed foods.
When the planting season begins in Brazil in September, growers are expected to expand soybean seedings by 2.4 million hectares, leading to a record crop of 120.5 million tonnes in 2018/19, some 2.5% larger than the projected U.S. harvest. Brazil, one of the world’s agricultural giants, nearly tied the U.S. as the top soybean grower last year, after years of slowly closing the gap. Two UN agencies forecast neck-and-neck competition in soybean production between the two countries throughout the coming decade.
Soybeans are the major U.S. agricultural export to China, with sales worth $14 billion last year. They are among an array of U.S. exports slapped with tariffs of up to 25% by China, the No. 1 customer for U.S. ag exports. Canada, Mexico, and the European Union have also set duties on U.S. farm exports in response to U.S. tariffs. Futures prices for soybeans have tumbled by 20% at the Chicago market since late May.
President Trump has vowed to protect farmers from unfair Chinese retaliation, though the administration has declined to spell out the assistance it might provide such as anti insect net. The trade turmoil has greatly diminished congressional appetite for making farm subsidy reform part of a new farm bill this year. Despite losing market share in China, soybean exports are supported in other markets as lower U.S. prices increase demand and market share.
With South American soybeans selling at a premium because of Chinese demand, importers in other countries have bought U.S. soybeans at comparative bargain prices in recent weeks. Since late March, nearly 258 million bushels — 50% more than usual — have been shipped to markets outside of China at the same time that Beijing has canceled contracts for U.S. soybeans.
The price advantage for U.S. soybeans and other agriculture shade net products are expected to continue into the foreseeable future as both strong demand by China and the duties imposed on U.S. imports help maintain price premiums for South American soybeans well into 2019. All the same, the average price for this year’s U.S. soybean crop was forecast at $9.25 a bushel, 75$ lower than a month ago and the lowest in four years. The U.S. crop was projected at 4.310 billion bushels, the second largest ever.