U.S. Soybean Exports & ND Harvest Basis: Navigating Trade War Uncertainty

Aug 6

A Cloud Over the Soybean Market

The U.S. soybean market continues to face uncertainty as trade war tariffs and a lack of Chinese new crop purchases loom large. As of now, no extension to the trade agreement has been signed, triggering concern among commercial buyers and causing harvest basis levels in North Dakota (ND) to weaken.

A Look Back at Buying Trends

Historically, Chinese purchases began in early July, with a heavier influx around August 1st. Over the past three years, however, buying has trended later in the season. This year, the absence of new Chinese orders, combined with tariff tensions, raises serious questions about soybean destination routes post-harvest.

Commercial Reaction and Local Market Pressure

With the Pacific Northwest (PNW) export market quiet and local crush facilities absorbing the excess, basis values have dropped. Shuttle loaders and crushers are seeing less competition for supply, resulting in lower offers to farmers locking in their basis. This has amplified pressure on ND harvest basis levels.

The Road Ahead: Strategy Amidst Uncertainty

While there is still a week left before the August 12th deadline, the market is in a holding pattern. Should China fail to sign an extension but still require small quantities, minimal purchases may occur, but their recent activity suggests they are well-stocked.

If no deal is struck, alternative trade routes may be needed, similar to the previous trade war scenario. However, that pivot will take time and may result in storage and transportation challenges during peak harvest.

Strategic Considerations for Farmers

With basis values under pressure and harvest fast approaching, farmers may be forced to prioritize logistical efficiency over potential gains. Storage constraints and harvest momentum could outweigh the desire to hold for a better basis.

While there’s a glimmer of optimism, Trump stated this week, “We’re getting very close to a deal”—the market remains on edge, awaiting whether the August 12th deadline will bring relief or require adaptation.

Alex Andel

Basis and Freight | Market Advisor, Northern Plains

As our basis and freight expert, Alex assesses current market conditions and forecasts future scenarios. His keen insights create transparency in the cash market, resulting in significant returns for our clients.

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Garret Brown