【By Observer News, Wang Yi】After the Argentine government announced the temporary cancellation of the export withholding tax on soybeans, Reuters reported on September 23 that Chinese buyers immediately ordered 10 ships of Argentine soybeans. Today, Reuters updated the data, stating that China added to its orders, and the total amount of Argentine soybeans purchased within two days has reached 20 ships, about 13 million tons.

The news reached the United States, where many people felt jealous and resentful. A member of Congress sarcastically complained to the U.S. news website Axios, saying that while the United States helped Argentina stabilize its economy, they instead harmed the interests of American farmers, calling it "a bitter pill to swallow."

On the 24th, Reuters cited two traders who said that since Argentina announced the cancellation of the export withholding tax on soybeans on the 22nd, Chinese buyers have ordered about 20 ships, 13 million tons of Argentine soybeans. One day earlier, this figure was still 10 ships.

A international trader who exports soybeans to China revealed that most of the soybeans ordered by China will be shipped in November, with about 20% to be shipped after the new season's Argentine soybean harvest in April next year.

Two Asian traders said that this order includes both the old and new seasons' soybeans, with pricing around $2 per bushel above the Chicago Mercantile Exchange November soybean contract. One bushel of U.S. soybeans is approximately 27.216 kilograms.

Traders said that the soybeans from Argentina help fill a potential supply gap in China, as China has not yet ordered even a little of the U.S. autumn harvest soybeans. Data from the U.S. Department of Agriculture show that this is the first time since 1999 that this situation has occurred.

Wang Wenshen, an analyst at China's Zhuochuang Information, pointed out that the profit margin for crushing Argentine soybeans in China can reach about 200 yuan per ton, which is quite attractive. Before the Argentine policy ends on October 31 or before its $7 billion quota is used up, "China is likely to further accelerate purchases from Argentina to fill the supply gap from November to January of the following year," "which will further reduce market reliance on U.S. soybeans."

Argentine farmers harvesting fall soybeans. Visual China

After the news of China's purchase of Argentine soybeans spread, there was wailing in the U.S. soybean regions. Ty Higgins, a spokesperson for the Ohio Department of Agriculture, told Axios, "This is a problem for the farmers in this state."

"People are increasingly worried that as the harvest increases, the market for corn and soybeans will no longer be as prosperous as before, which will put further downward pressure on commodity prices and farmers' profits," Higgins said.

"It's very unfortunate that when the U.S. was helping Argentina stabilize its economy, they instead harmed the interests of American farmers and weakened President Trump's negotiations with China," said Republican Representative Julie Fedorchak from North Dakota, expressing her bitterness, "It's a bitter pill to swallow for the soybean growers in North Dakota."

Following a local election that was unfavorable to the Milei government at the beginning of this month, the Argentine financial market fell into turmoil. On the 22nd, U.S. Treasury Secretary Bennett announced that the U.S. was ready to provide financial support to Argentina with "massive and strong" actions, including but not limited to currency swaps, direct purchase of currencies, and purchasing dollar-denominated government bonds using the U.S. Treasury's Foreign Exchange Stabilization Fund.

On the same day, the Argentine government announced the temporary cancellation of the export withholding tax on agricultural products such as grains, beef, and poultry meat, aiming to promote the country's agricultural sector to export more agricultural products, increase the supply of dollars, and stabilize the local currency exchange rate.

In fact, the bitter pill forced upon U.S. soybean farmers was sown by Trump himself. Soybeans are one of the most important agricultural products in the United States, occupying a central position in U.S. agricultural exports. Of the more than 4 billion bushels of soybeans planted annually by U.S. farmers, nearly a quarter is exported to China. Last year, the value of soybeans imported by China from the United States was nearly $13 billion, compared to about $2 billion 20 years ago.

However, after Trump initiated trade disputes, the orders for U.S. agricultural products from China sharply declined, causing severe damage to U.S. farmers. Dan Bass, president of Chicago Agricultural Resources Company, estimated that if China does not enter the U.S. soybean market before mid-November this year, the total loss of U.S. soybean sales to China could reach as high as 140 million to 160 million tons.

At the same time, Chinese companies are gradually turning to Brazil to purchase soybeans, and South American countries are rapidly seizing the market. Last year, more than 70% of the soybeans imported by China came from Brazil, doubling from 15 years ago.

Chad Hart, an economics professor at Iowa State University, said that China's sudden large-scale shift to Argentine soybeans has raised concerns in the U.S. about the agricultural economy of Iowa state.

The decline in soybean exports has affected not only the farmland in the state but also industries such as manufacturing, insurance, and logistics. A study model released by Iowa State University in July showed that the annual size of Iowa's soybean market is $5.8 billion, and if this impact continues, potential losses could reach $200 million.

"Our entire production system is built around Chinese demand," Hart said, "if Chinese demand disappears, it's hard to find an alternative."

Meanwhile, an international trader who exports soybeans to China told Reuters, "Even without U.S. soybeans, China will have enough soybeans."

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