NAPERVILLE, Illinois, Sept 19 (Askume) – The United States is experiencing one of the worst soybean export seasons in recent memory, with shipment levels rivaling those seen only a few years ago when the No. 2 exporter was locked in a battle with the top country over a trade war.
US soybean export sales for 2024-25, which began on September 1, have been stronger than average over the past month as China finally stepped up buying.
But just two weeks into the new marketing year, total soybean sales are at a five-year low, down 5% from the same period last year, and traders are concerned about a worryingly slow pace of U.S. soybean orders.
Lower US soybean sales are particularly disappointing because the US Department of Agriculture estimates that global soybean consumption will reach a new high in 2024-25 due to further expansion of soybean processing.
In addition, Chinese soybean demand growth in recent years has not been as robust as suggested a decade ago. Top exporter Brazil has easily captured the Chinese soybean business despite production falling well short of initial expectations in two of the past three seasons.
Recent export data is evidence of the US’s weakening control over China’s soybean demand. As of September 12, China had purchased 5.9 million tonnes of US soybeans for shipment in 2024-25, accounting for 37% of total sales.
Excluding the trade war of 2018 and 2019, this is China’s smallest share in 19 years.
Missing Chinese commitments are not hidden in the “unknown” category. Only 71% of total U.S. soybean sales in 2024-25 are destined for China or an unknown destination, well below the non-trade war average of about 80%.
Brazil is exporting fewer soybeans this year than last year, while U.S. soybeans have been competitively priced recently. But logistics have been disrupted by low water levels in the Mississippi River for the third consecutive year, limiting grain shipments to the nation’s busiest export hub.
Argentina, which exports mainly soybean products, is facing similar problems with river levels hitting record lows, slowing shipments and rising costs. Without a fix, business could shift elsewhere.
U.S. soybean exporters could use this help. As of last week, total U.S. soybean sales in 2024-25 were 32% of the USDA’s full-year export forecast, up 3% from last season’s meager level.
This is well below the non-trade war average of about 43% and less than the 35% of this time last year (in line with the recently concluded 2023-24 campaign). Notably, the USDA’s latest export forecast for 2023-24 is 5% lower than last September’s forecast.
This means exports are also at risk of declining in 2024-25, potentially adding to already substantial US inventories and possibly restricting prices.
Karen Braun is a market analyst at Askume. The opinions expressed above are her own.
The views expressed are solely the author’s own. They do not reflect the views of Askume News, which is committed to integrity, independence and non-partisanship in accordance with the principles of trust.
