Recent Chinese Purchases of U.S. Soybeans: Strategic Buying Overriding Fundamentals

By Ming Wang and Shawn Arita

Under the recent U.S.-China deal, China formally suspended the retaliatory tariffs imposed in March 2025 in response to the U.S. “Fentanyl tariff,” which had covered major U.S. farm products including soybeans, corn, wheat, beef, pork, poultry, dairy, and sorghum. However, the 10% retaliatory tariff imposed in April 2025 in response to the U.S. reciprocal-tariff measures remains in place. As part of the agreement, China also committed to specific soybean purchase volumes: 12 million metric tons (MMT) from the U.S. in 2025, followed by 25 MMT annually during 2026-2028, totaling 87 MMT over the four-year period.

These commitments raise an important question regarding the timing and conditions under which China will fulfill the agreed volumes. Historically, China’s soybean procurement has been tied closely to relative landed prices. China tends to buy U.S. soybeans only when they are cost-competitive relative to Brazilian alternatives once freight and tariffs are included. Figure 1 shows this relationship: weekly U.S. net export sales to China move closely with changes in the Brazil-U.S. landed price spread. Between 2020 and 2024, U.S. soybeans generally carried about a $20/mt premium, and larger purchases occurred when the premium narrowed. The pattern held even during periods of improved diplomatic relations. During both retaliatory tariff periods, 2018–2020 and 2025, U.S. exports to China declined sharply when tariffs widened the U.S. price premium, indicating that day to day procurement was guided more by market fundamentals than by political signaling. In these earlier episodes, strategic decisions to impose tariffs affected relative landed prices, but Chinese buyers did not consistently purchase U.S. soybeans at a sizable premium to Brazilian supplies.

Figure 1: Brazil-U.S. soybean landed price with tariff in China differential by week (green line) and U.S. weekly net export sales to China (yellow bars)

Note: Landed price in China includes shipping and insurance costs with tariffs (both MFN and retaliatory). The retaliatory tariff spike in April 2025 is not captured for presentation purposes.

Source: NDSU using data from Fastmarkets and USDA FAS Export Sales.

Figure 2 shows that in November 2025, China recorded several daily flash purchases of U.S. soybeans at a time when the U.S. landed price was roughly $80/mt higher than Brazilian supplies, marking a departure from this pattern and pointing to strategic driven purchases occurring despite unfavorable price fundamentals. Although the new U.S.-China deal does not specify how the committed soybean purchase volumes should be distributed throughout the year, the November transactions signal that some purchases may occur even when U.S. soybeans are not the lower-priced option, signaling that trade commitments may be overriding normal price-driven purchasing patterns.

Figure 2: Brazil-U.S. soybean landed price with tariff in China differential by week (green line) and U.S. daily flash sales to China (yellow bars) in 2025.

Source: NDSU using data from Fastmarkets and USDA FAS Export Sales

Ming Wang – ming.wang@ndsu.edu

Shawn Arita – shawn.arita@ndsu.edu