China Grains, Cereal & Legumes insights

China isn’t buying any new-crop US soybeans and it’s easy to understand why. As part of the crossfire in the latest battle of the US-China trade war, China imposed a 20% retaliatory tariff on American beans. Actually, it’s more like 34% after including various taxes. China, then, naturally prefers to fill its considerable soybean needs

She emphasized that currently, China only allows imports of Russian spring wheat and barley, while winter wheat has no essential differences in variety and quality, and also follows strict quarantine standards, so Russia finds the current restrictions "hard to understand." Ms. Lut was one of the members of the delegation accompanying Russian President Putin on his visit to China this week. She said on Tuesday that Russia is maintaining systematic communication with China and is confident of eventually obtaining export licenses. She emphasized that winter wheat and spring wheat have exactly the same quarantine requirements, especially in terms of avoiding the carriage of harmful organisms, which must meet the same standards. Therefore, Russia believes that there are no additional risks or obstacles. Currently, the Chinese market's demand for Russian grains is continuously growing. Chinese customs data shows that in 2024, China imported a total of $8725.2 million worth of wheat from Russia, significantly higher than the $3471 million in 2023, indicating the rapid expansion of Sino-Russian grain trade. The amount of barley imported by China from Russia also increased from $110.3 million in 2023 to $177.1 million in 2024. Russian experts generally believe that winter wheat is superior to spring wheat in terms of yield and market potential. If China grants import licenses, it will further expand the scale of exports to China. As one of the world's major grain exporters, Russia has been seeking to strengthen agricultural product trade cooperation with China in recent years, while China, as the world's largest grain importer, is increasingly in need of diversified supply sources. Overall, the negotiation of winter wheat export rights not only involves issues of market access for agricultural products but also reflects the deepening trend of Sino-Russian cooperation in agricultural trade. If approved, Russia's wheat exports to China are expected to increase significantly, bringing new growth points to its agricultural economy.

The US Department of Agriculture (USDA) has improved the country's trade deficit forecast, but soybean exports and shipments to China continue to show a sharp decline amid trade conflicts. USDA experts presented an updated quarterly forecast, which states that the US trade deficit in fiscal 2025 will be at $47 billion, which is $2.5 billion