Insight Focus
Markets respond following Trump–Xi phone call. Chicago soybean futures and US export prices surged after signals of larger Chinese purchases, lifting values from January lows despite ample global supply. However, Chinese futures stayed weak under Brazil harvest pressure, raising doubts over how much additional US buying China can absorb and limiting further upside.
Scepticism Over Viability of 20M Tonne Pledge
The soybean market was jolted on February 4, when President Trump announced the contents of a phone call with Chinese leader Xi Jinping. According to Trump, China agreed to consider lifting purchases of US soybeans to 20 million tonnes for the current season.
But sceptics questioned how China could fulfil an even larger US soybean purchase pledge, since the purchases would occur during months when China typically buys large volumes of cheaper Brazilian beans.
The October 2025 12-million-tonne pledge was apparently fulfilled by Chinese state-owned companies buying US beans at premium prices for storage in reserves. Questions remain about whether China’s state reserves have room to store additional US soybeans. Chinese private-sector buyers have still purchased few, if any, US beans and reportedly have already booked large volumes of Brazilian soybeans for March–April delivery, citing the Brazilian price advantage.
If the new Chinese purchase commitment is fulfilled, it could boost US demand and reduce US carryout. However, China would see an offsetting increase in carryout if the beans are stored in reserves, resulting in no change to the global supply-demand balance for 2025/26.
Thus, with ample global supplies, there appears to be little room for further price gains. If high Chicago futures prices are sustained, basis levels for Brazilian sellers would shrink. Market analysts have raised the possibility of other unusual phenomena, such as exports of Brazilian soybeans to southeastern US regions.
Soybean Prices Jump on Trump–Xi Readout
US soybean exports for the 2025/26 marketing year were at the slowest pace in years. China had not bought any US soybeans until late October, when Trump and Xi met in South Korea and China agreed to buy 12 million tonnes.
By the end of January 2026, cumulative US sales to China had climbed to nearly 10 million tonnes, and a large portion of the 3 million tonnes of sales to “unknown” destinations was suspected to be bound for China. US Treasury Secretary Bessent said China had met the 12 million tonne target, but sales were still behind their usual pace. The new Chinese purchase target would put US sales to China close to their year-earlier level.
Source: USDA
Prior to Trump’s February 4 announcement, the flurry of Chinese buying had tailed off, and news of the big Brazilian crop—some recent estimates exceeded 180 million tonnes—signalled supply pressure. Attention in the US had shifted toward increases in domestic crush driven by biodiesel mandates and a US Treasury announcement of arcane details of a “45Z” biofuel tax credit that would—among other provisions—exclude feedstocks imported from outside North America.
The market rallied after Trump’s February 4 phone call readout. The Chicago March contract rose 49c/bushel to USD 11.15/bushel at the close on February 6, just short of the USD 11.57/bushel peak reached in November 2025 following China’s earlier 12 million tonne pledge. The price rose 4.6% in three days. It was up more than one dollar from a January dip that followed a bearish WASDE report.
The rally translated into rising export quotes at US Gulf ports. On February 6, the USDA reported an average bid of USD 12.25/bushel for current shipments from Gulf ports, up from USD 11.65 on January 21. Rising US FOB prices contrasted with weak prices in Brazil, which reflected expectations of a record harvest and strengthening of the Brazilian currency against the dollar during January.
Brazil Supply Pressure Weighs on Chinese Soybeans
There was no corresponding rally on China’s Dalian Commodity Exchange (DCE). All soybean futures prices dropped during the final week of January, and the May contract continued to fall during the first week of February. The decline reflected a weak Chinese macroeconomy and news of good progress on Brazil’s harvest that cemented expectations of lower prices when new-crop Brazilian beans arrive in China.
Source: DCE
During January–February, soybean arrivals in China were at a seasonal low. But with many crushers facing negative margins, a slow market and ample inventories, an industry survey found that many Chinese crushers planned to idle their plants one or two weeks ahead of the February 17 Lunar New Year holiday. Nearly all planned to reopen promptly at month’s end.
Brazil exported just 1 million tonnes of soybeans to China during January 2026. The unit value of those shipments declined to USD 435/tonne, down about 1% from December and marking the first monthly decline since April 2025. In Brazil, weekly producer prices reported by CONAB fell about 13% during January in Mato Grosso State, where the harvest was most advanced. Strengthening of Brazil’s currency during January added downward pressure to prices in Brazilian Reals.
In China, a February 6 report posted on a soybean market forum commented that ample supplies are putting downward pressure on futures prices. Expectations of lower spot prices when new-crop Brazilian soybeans arrive at Chinese ports during the spring and summer months are reflected in a discount of Chinese May and July futures contracts relative to the March contract on the DCE.
The May 2026 contract—when arrivals from Brazil typically peak—is the most heavily traded imported soybean contract on the DCE (note that soybean meal and oil contracts are traded more heavily than soybeans). On February 6, the May contract was discounted by about 5.8% from the nearby March delivery price.
Source: DCE
Chicago Futures Diverge from China Curve
In contrast, Chicago futures contracts have a slight inverted-U price structure, with prices peaking for July delivery at a premium of 1.2% over the March contract as of February 6. Unlike the DCE pattern, trading volume in Chicago is largest for the nearby March contract and drops off for May through September.
Source: CME
