Source: Intermodal According to Intermodal’s Head of Research Department, Mr. Yiannis Parganas, “upon closer examination, the lower soybean prices spurred a surge in Chinese imports from Brazil resulting in a significant stockpile. Despite a recent decline over the past two weeks, soybean inventories at Chinese crushing plants remain elevated at 7.
58 million tonnes, reflecting a 35.6% increase compared to the same period last year. However, price may not be the sole contributing factor.
The increased stock levels could reflect the uncertainty surrounding the upcoming U.S. presidential elections and the potential for stricter tariffs against China.
Any retaliatory measures from China could severely impact the soybean market, as it remains particularly vulnerable to additional tariffs on grain trade – similar to what occurred in 2018 following President Trump’s tariffs on aluminum and steel imports from China. In the short term, this uncertainty may lead to increased Chinese demand for U.S.
soybeans, with an emphasis on further stockpiling. Considering that the last quarter is traditionally the strongest period for U.S.
exports, with export volumes to China typically rising in October and November, just before Inauguration Day, it is possible that Chinese soybean imports will remain elevated despite the current healthy stockpiles. China’s food security policy may drive increased demand amid the uncertainty surrounding potential new tariffs following the upcoming elect.