Arabfields, Sophia Daly, Financial Analyst specialized in Agriculture and Futures Markets — China’s soybean demand is expected to weaken in the coming months as animal feed consumption slows and crushing margins remain negative, putting further pressure on U.S. exporters just as the American harvest enters its busiest period.

The world’s largest soybean importer has already secured much of its supply through the Lunar New Year in early February, with private processors relying heavily on shipments from Brazil and Argentina as well as state reserves. The shift leaves limited room for additional U.S. cargoes, particularly after soybeans were excluded from proposed tariff reductions following last week’s U.S.-China talks.

For Chinese processors, the economics of buying foreign beans have become increasingly difficult. Soybeans scheduled for November shipment from the U.S. Pacific Northwest and Gulf were showing crushing losses of between 120 yuan and 200 yuan, or about $17.90 to $29.83, per tonne. Brazilian supplies were also unprofitable, although losses were smaller at around 120 yuan per tonne.

At a processing plant in Rizhao, one of China’s major soybean crushing centers, processors were losing 33.54 yuan per tonne on Tuesday, according to LSEG data. Such margins give buyers little incentive to secure additional cargoes while inventories remain high.

Soybean stocks at 111 Chinese crushing plants reached 7.96 million tonnes in the week of September 25, according to Mysteel. That was the highest level recorded by the consultancy in at least 15 years.

The situation is also visible in government auctions. Only 37.3% of the 514,000 tonnes offered in Sinograin’s latest auction of imported soybeans was sold, highlighting weak buying interest at a time when processors already have substantial supplies.

For people working in China’s soybean-processing industry, the combination of expensive imports and weak demand is becoming a daily business challenge. Private processors have already booked most of their October shipments and a large portion of November cargoes from Brazil and Argentina, according to traders and industry executives.

Brazil remains particularly competitive. Brazilian soybeans were priced at about $590 a tonne, cost and freight included, excluding tariffs, broadly in line with U.S. cargoes before duties. Brazilian beans also generally have a higher oil content, making them more attractive to Chinese crushers.

The trade shift is reflected in booking activity. Chinese buyers reserved about 50 soybean cargoes during the first three weeks of September, the lowest level in four years. State-owned companies COFCO and Sinograin accounted for about 30 U.S. cargoes, while private buyers largely turned to South American suppliers.

The U.S. soybean sector is entering this period with an additional disadvantage. American soybeans remain subject to a 10% additional Chinese tariff, which has made purchases uneconomical for many commercial buyers. China’s recent agreement to reduce tariffs on several U.S. agricultural products did not include soybeans.

The outlook is therefore becoming more difficult for U.S. exporters in the months ahead. If Chinese feed demand remains weak and crushing margins fail to recover, private processors are likely to keep favoring South American supplies, rely on government reserves or temporarily reduce processing activity rather than increase imports.

China’s domestic livestock market is an important part of the equation. The country’s sow herd has been declining as authorities seek to address excess capacity in the pig industry, a development that could reduce demand for soybean meal used in animal feed during the fourth quarter.

For U.S. farmers, the timing is significant. The American soybean harvest is approaching its peak, increasing the need for exporters to find buyers for fresh supplies. Chicago soybean futures had already fallen about 1.5% since the beginning of the week as traders assessed weaker Chinese demand and the approaching harvest.

The market could face further pressure if Chinese buyers continue to stay away from U.S. cargoes while American supplies increase. A recovery in crushing margins or stronger feed demand could change that picture, but without such an improvement, Chinese processors are likely to remain cautious.

For now, the trade flow is increasingly favoring South America, while U.S. exporters face a narrower market just as their new crop becomes available. The direction of Chinese demand, the evolution of processing margins and the future of tariff negotiations will be key factors for soybean prices through the final months of 2026 and into early 2027.