The trade war between China and the United States has all but stopped China from buying American soybeans. Instead, the country is buying soybeans from places like Brazil and Argentina.
In fact, Chinese processors are planning to import record volumes from Brazil during the fourth quarter, a timeframe that is usually busy for American shippers.
According to University of Missouri Ag Economist Pat Westhoff, purchases for the current and coming marketing years is a fraction of the long-term average. His main concern? Losing demand from China and struggling to get it back.
“I think it's probably likely that they will buy some beans from the U.S. but it will be nothing like the quantities they’ve bought in past years,” he explains. “So, we have to make it up elsewhere and guess what? There’s not enough elsewhere.”
In order to make up the demand loses from China, Westoff says Brazil would need to stop selling soybeans anywhere else. He says that’s highly unlikely.