Permanence of Chinese tariffs on US soybeans could benefit Brazil: sources

While participants in the US soybeans export market downplayed the impact of the continuation of Chinese tariffs on US soybeans, sources in the Brazilian market consider it positive for the competitiveness of Brazilian soybeans.

Two days after the Sept. 24 meeting between US President Donald Trump and Chinese President Xi Jinping, China's Foreign Ministry said in a statement that both countries had agreed to a $30 billion tariff reduction framework covering certain products, including corn and soybean seeds, but not soybeans.

After the news, Chicago Board of Trade soybeans futures plunged, with the November (X) contract falling 30.75 cents on Sept. 28 to 1288.25 cents/bu, and the January (F) contract dropping 29.5 cents to 1303 cents/bu.

Sources in the CIF New Orleans market said soybeans "would have been a nice add" to the list of products that will benefit from tariff reductions, as it would have boosted movement in the barge market.

However, the sentiment heard among participants in the US export and soybean processing markets was different, with some pointing out that China's state buyers Sinograin and COFCO, which have been heard active in the US market, have always been exempt from tariffs.

"[The addition of soybeans] matters, but not to that extent," a trader in the FOB Gulf market said. "State buyers have always been exempted."

"I fully expected that [exclusion of soybeans]," a second trader in the FOB Gulf market said. "It's not surprising, because China already has a deal for 25 million mt worth roughly $15 billion, and including beans would have consumed half of the 30 billion trade package."

"Additionally," this source added. "Removing the tariffs would not make US soybeans any more competitive to materially change trade flows."

"I hope they raise tariffs," a US crusher said. "I don't want any soybeans leaving the US."

S&P Global Energy analysts and sources in the Brazilian market believe that continued tariffs could benefit other soybean-exporting nations.

"I think it's slightly beneficial or at least neutral for all major soybean exporters outside the US," principal crop analyst Aaron Gerdts said, "as it will continue to limit US exports to China to a level the US-China governments agree to, in this case 25 million metric tons."

"The tariffs remaining in place are generally viewed as supportive for Brazilian soybean prices and premiums," a Brazilian trader said. "But the impact is more limited at this stage of the season than it would have been earlier in the year."

"Brazil is nearing the end of its 2025-26 export campaign," a second source said. "And old-crop availability has become increasingly tight, with farmer-selling slowing down and crushers competing for remaining supplies."

CERA analysts added that tariffs alone are not the only fundamental to watch, as Brazil's production level could also determine China's purchases of US soybeans.

"If Brazil's production remains high," the analyst said, "I do not think China would need US beans."

S&P Global Energy CERA forecasts Brazil's soybean production for the 2026-27 season at 177 million mt, down from 188 million mt forecast for the 2025-26 season.

Platts, part of S&P Global Energy, assessed SOYBEX FOB New Orleans for November shipment at $520.93/metric ton on Sept. 29, while the outright price for CIF New Orleans for October shipment was at $515.79/mt. SOYBEX FOB Santos for November loading was assessed at $526.47/mt.