US-China truce: soya bean trade revival and bulker market implications

Logistical and commercial doubts

In a report, SSY head of futures research William Tooth and dry bulk analyst Vriddhi Khattar noted that China has a limited near-term need for large US soya bean imports. According to SSY, domestic inventories – currently around 43 mt – are sufficient to cover crush demand through November, leaving only a modest 5 mt shortfall through February–March 2025.

“With another bumper Brazilian crop projected for early 2026, potentially exceeding 155 mt, China’s reliance on South American beans looks set to persist,” SSY said. Brazil and Argentina together have supplied nearly all of China’s soya bean requirements in the 2024/2025 marketing year – 78 mt out of 108 mt imported so far.

The shipbroking firm also highlighted the commercial disadvantage of US soya beans compared with Brazilian supply. Analysts pointed to a narrower US–Brazil FOB price gap, which, coupled with tariffs still in place, renders US cargoes uncompetitive. In addition, negative crush margins in China and the expansion of US domestic crushing capacity further constrain the potential for an export recovery.

“Until there is clarity on any tariff suspension or trade policy adjustment, there is little commercial incentive for Chinese crushers to turn to US supply,” SSY added.

Analysts have also questioned whether shipping 12 mt of soya beans before year-end would be feasible, as this would require a pace of 1.33 mt per week over the next nine weeks.

“Historical shipping rates suggest this pace would not be completely unrealistic, but it would be towards the upper end of historical performance,” SSY noted, referring to a five-year average of 1.28 mt per week.

To sustain such a pace, SSY said, Panamax availability in the North Atlantic would likely tighten, with the regional fleet currently standing at 437 vessels, down from 476 a year ago. Most US soya bean exports – roughly 80% – typically move through the US Gulf, though low Mississippi River water levels continue to drive up barge rates and could constrain throughput.

“In that optimistic scenario, short-term Panamax demand could strengthen, supporting a brief spike in Atlantic basin rates and volatility,” SSY concluded.

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