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Soybean futures fall as trade deal with China delayed, Brazil steps up exports

A market analyst says a possible delay in an upcoming U.S. and China meeting could slow progress on a trade deal, and that is part of the reason soybean futures have traded 70 cents lower (limit down) as the week begins.

Arlan Suderman with StoneX Group tells Brownfield “the White House has clarified they still plan on meeting President Xi of China, but it might not happen on March 31 to April 2 as currently scheduled.”

The grain markets had been expecting China to buy an additional 8 million metric tons of U.S. soybeans this marketing year, but Suderman says recent trade discussions haven’t confirmed those details.

“They did indicate an interest in other ag commodities like beef, pork and other row crops excluding soybeans. That starts to cast significant doubts about whether there will be any soybeans or what volume there might be, if soybeans are included at all.”

The other factor influencing U.S. soybean futures is that Brazil has cleaned up some inspection problems for soybeans going to China. Suderman says there were complaints about contaminated shipments.

“Brazil had recently increased its inspection requirements at the request of China for soybeans going from Brazil to China. That resulted in some cargoes being rejected. Those inspections were taking place at Brazil as those cargoes were being loaded.”

While the lower soybean futures could be frustrating for some U.S. farmers, Suderman says domestic market opportunities, like a strong Renewable Volume Obligation biofuel announcement, could provide more support to the market in the future.