As a US/China Trade Deal Drags On, Delta Beans Sweat.

Every day without a US-China trade deal adds to uncertainty for US Delta farmers.

Harvest demand is everything for Delta soybeans. Lacking a major domestic crush industry, the market is dependent on NOLA exports.

Storage this year will likely be used for corn, which is harvested first and is seeing decent carries Sep forward.

With weak new crop export sales on the books to date, the pressure is on.

2018 As An Analogue Year

When the first US-China trade war erupted in early 2018, new crop CIF NOLA bean basis briefly went negative.  It eventually moderated somewhat and by the end of July Delta bean basis along the river was -10x to -20x.  But as harvest progressed, Delta river basis collapsed to sub -50x.  You can see it in the image above.

Anyone who remembers that year remembers a couple things.  

1) China was gone

2) Bean quality was terrible

Those two items combined to pinch Delta farmers with cheap basis and highly punitive quality discounts.

This was the first time I groundpiled soybeans in Arkansas, as there was simply not enough export market for our beans.  Gulf exports were so slow there was no capacity to blend off quality.  Beans traveled north from MS and AR into IL and MO to crush.  

It was a mess.

China’s Impact

Without China this fall, we are at risk of repeating that scenario.

The below chart shows weekly Delta bean harvest progression for 23, 24, and 25.  I’m using 3 yr average harvest pace for 2025 with June acres and last year’s state yields.  These are the bars in the chart.

The lines in the background show two things.  The purple shaded area represents weekly NOLA bean export shipments for the 2024 marketing year.  The orange represents the non China exports for the same year.

Bottom line.  Without China, the river is long Delta beans into November.  

Keep in mind this look ignores any upriver supply off the Ohio or Mississippi.

This is why U/X and X/F spreads are and will continue to be weak.

Gone are the days when Sep exports actually strained available Delta supply.

But back to the present…Harvest is around the corner and Delta growers have a decision to make:

Will China demand come through? Or are we looking at another 2018?