US soybean exports may fall 20% without China trade deal, AgResource says

Agribusiness consultants AgResource warned that US soybean exports could plummet by 20% and prices paid to farmers could sharply decline if the trade dispute between the United States and China is not resolved. The ongoing tensions have limited US soybeans’ access to their largest market, causing significant concerns in the agricultural sector.

Despite the temporary truce announced in the US-China trade war, the reduced Chinese duties on US soybeans are still too high for them to be competitive in the market. AgResource President Dan Basse highlighted that unless a substantive trade deal is reached, US soybean exports could drop to 1.5 billion bushels from the initial estimate of 1.865 billion.

Basse also noted that US soybean futures could plummet to $9 per bushel if the situation persists, significantly impacting farm income. He emphasized the urgency of reaching a deal by late summer to prevent further economic pressure on US farmers.

If tariffs are restored to previous levels through a trade agreement, soybean prices could potentially surge to $13 per bushel. However, Basse expressed concerns about Brazil’s increased soybean exports, posing additional challenges for US farmers.

China, which heavily relies on Brazilian soybean imports, has been a crucial market for US farmers. With Brazil’s abundant supplies, lower prices, and no Chinese tariffs, American farmers face tough competition in the global market.

Furthermore, Basse highlighted potential impacts on corn and wheat prices in Chicago, with prices expected to decline significantly if the trade tensions persist. Corn prices could drop to $3.70 per bushel and wheat prices to $4.90, affecting the broader agricultural market.