Here's what the U.S.-China trade truce really means for the U.S. soybean market - and for farmers

By Myra P. Saefong

U.S. farmers may never regain the market share lost to rivals in Brazil and elsewhere

Instead of buying soybeans from the U.S., China has turned to other sources such as Brazil to meet its needs.

China has made a pledge to buy U.S. soybeans over the next few years, fueling hope for farmers who have been caught in the middle of a trade war between the two nations.

Yet the damage to the U.S. agricultural market may have already been done.

While China has turned its attention to alternative sources such as Brazil, the U.S. and its farmers have fewer options, having relied on China to buy around half of American soybean exports for years.

"We lost market share in the last trade war that we never gained back," said Faith Parum, an economist at American Farm Bureau Federation. The last major trade war between the U.S. and China began in 2018, during President Donald Trump's first term in the White House, and has continued during his second term.

"China's total soybean demand stayed strong, but they've been filling most of that from Brazil over the last few years," Parum told MarketWatch. Brazil alone has shipped around 2.5 billion bushels to China this year, while U.S. exports have been relatively small, she said.

Under a deal with the White House announced on Nov. 1, China will buy at least 12 million metric tons of U.S. soybeans over the last two months of this year. It will also purchase at least 25 metric tons of U.S. soybeans in each of the next three years. Prior to the agreement, China had not purchased soybeans from the U.S. for the current marketing year, which began in September.

China's purchase commitment "takes us back to where things were before the trade war," said Parum. "It's a strong starting point, and actual purchases could exceed those minimums if market conditions remain favorable."

If the agreement is fully implemented, it could help strengthen soybean prices for U.S. farmers, she said. It could, however, also "influence how China sources soybeans from South America."

Market share

Brazil and Argentina have become major suppliers of soybeans, and it will be important to see "whether China diversifies purchases or continues to rely primarily on Brazil," Parum said.

Arlan Suderman, chief commodities economist at StoneX, said China has been investing in Brazilian agriculture and infrastructure for the past two decades, "supporting development that would make Brazil the low-cost provider of corn and soybeans that it is today."

As Brazil increases production, China buys more from it, Suderman noted, adding that things are nearing a point where "Brazil, with little help from Argentina and others, could meet all of China's import needs - and largely do it at cheaper prices."

Trump's tariffs may have sped up that cycle somewhat, but things were quickly headed in that direction anyway, Suderman said. New-crop soybeans from Brazil will almost certainly be cheaper than U.S. soybeans once harvest begins there in a couple of months, he added, citing currency exchange-rate differences.

U.S. soybeans were actually priced cheaper than Brazilian soybeans delivered to ports in China before the U.S.-China agreement - but U.S. soybean futures prices rallied following the deal's announcement, and Brazilian old-crop supplies are now cheaper than U.S. soybeans loaded out at the Gulf of Mexico (which the U.S. now calls the Gulf of America) and shipped to China, said Suderman.

China left a 10% retaliatory tariff in place on U.S. soybeans, which means U.S. soybeans delivered to China are still roughly $1.50 more per bushel than Brazilian soybeans, he said. At the time he made his comments, U.S. soybean prices were trading at around $11.20 a bushel. Soybeans for January delivery (SF26) (S00) trading in Chicago settled at $11.47 on Thursday.

The U.S. Department of Agriculture has forecast soybean exports of 1.64 billion bushels for the 2025-26 marketing year, down 50 million bushels from the October forecast, according to the monthly report from the government agency released Friday.

"While U.S. soybean exports are expected to rise to China for the rest of the marketing year, these higher shipments could be offset by reductions to other markets where the United States no longer holds a large price discount compared to other exporters," the USDA said in its report.

Caught in the middle

Some soybean farmers weren't very impressed by the latest U.S. deal with China.

"I don't think soybean purchases by China will ever return to pretariff levels," Ed Hodgson, who farms 1,500 acres of land in Rice County, Kan., told MarketWatch. "The low-cost producing country will fill China's needs."

'I don't think soybean purchases by China will ever return to pretariff levels.'Ed Hodgson, Kansas farmer

Even if a mooted $13 billion bailout happens, "it just helps us get to the end of the year," Hodgson said. "There won't be anything left in most farmers' pockets to get us into the 2026 planting season."

There's been speculation that the Trump administration will offer a bailout to farmers. Trump was considering providing $10 billion or more in aid to U.S. farmers, the Wall Street Journal reported early last month, citing people familiar with the discussions.

In late October, Sen. John Hoeven of North Dakota told reporters that a market facilitation program, similar to the farmer bailout Trump issued during his first-term trade wars, was ready but was being delayed by the government shutdown, according to a report from Politico.

Also read: Trump floats using tariff money to help farmers hurt by trade wars

"Unfortunately, nothing has truly been 'gained' for our farmers," said Jake Hanley, managing director and senior portfolio specialist at Teucrium. "They remain caught in the middle of a trade war where they are a vulnerable target."

Soybean prices rallied on optimism following the U.S. trade announcement earlier this month, but Chinese buyers continue to favor Brazilian beans, Hanley noted.

"So this is a 'show me the money' moment for grain markets," he said, adding that the rally in soybeans "needs confirmation, not just hope."

What's next?

The good news is that global demand for soybeans remains strong and other markets are growing, said Parum of the American Farm Bureau Federation.

The recent U.S. trade agreement with Southeast Asia is opening new opportunities in countries like Vietnam, the Philippines and Malaysia, she said, with Southeast Asia full of fast-growing economies with rising demand for high-quality feed ingredients.

"Diversifying our export base makes U.S. farmers less dependent on a single buyer and helps rebuild long-term global demand," said Parum.

In emailed comments to MarketWatch, White House Deputy Press Secretary Anna Kelly said: "President Trump cares deeply about our agriculture industry, and he has taken unprecedented action to level the playing field for American farmers after decades of unfair trading practices."

Kelly continued: "His success in opening the Chinese, European, British, Japanese, Vietnamese and numerous other foreign markets to U.S. soybeans and other agricultural exports will pay off in the long and short term by expanding opportunities for farmers to send made-in-America goods around the world."

The U.S. has been building up its domestic demand base for several years to replace Chinese business, but it still needs several more years to get there, said StoneX's Suderman. China's agreement to buy U.S. soybeans helps "bridge that gap" to keep demand strong while the domestic demand base is built, he added.

Parum believes the U.S.-China truce is a positive step toward "rebuilding trust and stability in trade."

"What matters now is enforcing the commitments so farmers have consistent, predictable access to markets," she said. "Steady markets, fair competition and enforceable trade agreements, both with China and growing partners in Southeast Asia, will keep the U.S. soybean sector strong for the long term."

-Myra P. Saefong

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11-14-25 1314ET