Soybean Exports To China Top $3 Billion, Narrowly Miss 1-Month Record

U.S. soybean exports to China fell just shy of topping the single-month record set in November 2013, according to the latest U.S. Census Bureau data.

Soybeans have been at the heart of the U.S.-China trade war, now approaching its third anniversary.

Soybeans matter because the United States has sold more than 50% of all its soybean exports to China since 2008, with only one exception. In fact, the year President Trump was elected, China accounted for better than 62% of the $22.88 billion total.

China, the world’s largest producer, importer and consumer of pork, uses soybeans to, among other things, feed its pigs.

Broad brush versus laser assault

While Trump issued broad-brush tariffs on up to $370 billion in U.S. imports from China, President Xi Jinping’s used a laser-like approach. Most prominent among those strikes was the one at soybeans and America’s so-called “red states,” Republican-dominated states where soybeans are grown.

In 2018, in both September and November — the height of the short, soybean-exporting season in the United States — soybean exports to China fell to zero. That’s the only time exports to China in those two months had fallen to zero in nearly two decades.

China was sending a message.

That’s also the only year since 2008 that a majority of U.S. soybean exports weren’t China-bound. The total was just over 18%.

For the month of October 2020, the most recent data, China accounted for 73% of all U.S. exports, according to Census data at ustradenumbers.com. The total, $3.5 billion, was second only to the total in November 2013, $3.51 billion.

Whether the November 2020 total will break the record from 2013 will be known later in the week, when new data is released.

All 10 of the top 10 months for U.S. exports to China over the last 18 years have occurred in either October or November, with six in October and four in November. Three of the top five have been in November.

Why the surge in last fall? It could be tied to a problem with crops in Brazil and Argentina expected in the coming months, due to a hot and dry planting and growing season, which is opposite that of the United States. Another factor could be China trying to scramble to meet exports volumes promised during the only agreement reached in the nearly trade war since President Trump launched it in 2018. Whatever, soybean futures are at a 6-six year.

Record year not in the offing

Regardless of what the data for November 2020 holds, China will almost certainly top 50% of U.S. exports by the time the annual data is released in February, the 11th time in the last 12 years. At the moment, that percentage is at 48%, buoyed by the October data.

Nevertheless, China will not set a U.S. record for soybean purchases in 2020. In fact, it will fall below the $14.2 billion total from the year President Trump was elected, 2016, and likely below the $12.22 billion total his first year in office, 2017.

The four greatest totals occurred during the tenure of his predecessor, President Obama, including the record year of $14.88 billion in 2012.
Source: Forbes