Show-Me Market: Traders Doubt China’s Farm Purchase Pledges Even After Beijing’s Skeptics Were Proved Wrong Once
China’s July 2 statement on reciprocal tariff cuts for ag products offers fresh hope, but a slow new-crop sales pace and USDA’s confirmed sales discipline keep the burden of proof on Beijing
The skepticism is real — and widespread. A significant share of commodity analysts and traders doubt China will fully deliver on its stacked set of purchase commitments: the 25 million metric tons (MMT) of U.S. soybeans annually through 2028 pledged after the October 2025 Busan summit, and the additional $17 billion per year in “aggregate” agricultural purchases announced by the White House after President Trump’s May visit to Beijing (prorated for 2026).
The doubts fall into familiar buckets.
First is history: China fell short of its Phase One targets in 2020-21, and critics argue that big headline dollar figures make for attractive politics but weak enforcement, especially when global prices swing or Chinese demand softens.
Second is economics: Brazilian soybeans remain price-competitive, Brazil is harvesting another record crop, and Chinese crushers buy where the math works — a point Beijing itself keeps reinforcing by insisting purchases will be made “based on market conditions and demand.”
Third is verification: the $17 billion pledge was announced by the White House and never explicitly confirmed by Beijing, prompting trade policy analysts such as the Hinrich Foundation’s Deborah Elms to caution against one-sided announcements.
And fourth is ambiguity baked into the deal itself — it has never been clearly specified whether the 25 MMT applies to the calendar year or the marketing year, which matters enormously for judging compliance.
The skeptics’ mixed scorecard. Are these the same voices who wrongly predicted China would ignore the October 2025 Busan agreement? Partly, yes — and their earlier miss deserves to be part of the record. When the initial 12 MMT commitment was announced last fall, plenty of traders (and more than a few analysts) dismissed it as political theater, noting sales through the original December target date reached only about 6 MMT. But China kept buying past the deadline: USDA’s Foreign Agricultural Service reported that by late February, China had purchased or shipped 10.8 MMT of the 12 MMT commitment, with another 2.19 MMT sold to “unknown” destinations widely assumed to be Chinese state buyers. By most accountings, Beijing effectively fulfilled the first tranche by the extended end-of-February window administration officials had signaled.
The skeptics were wrong on the direction, if not entirely on the sluggish pace.
That said, the current doubters have fresh ammunition. New-crop commitments for the marketing year beginning in September stand at a paltry level — roughly 200,000 tons to China, with total new-crop sales to all destinations of 2.24 MMT as of mid-June, which Allendale’s Rich Nelson notes is the fifth-worst start in 25 years. Some Chinese analysts even argue the 8.33 MMT imported from January through May should count toward the 2026 commitment, while most Western analysts assign it to the 2025 pledge — a bookkeeping dispute that itself illustrates why traders discount political tonnage targets.
In short, the crowd that was wrong about Busan follow-through is now pointing at a genuinely slow order book, and this time the burden of proof sits with Beijing.
USDA’s confirmed sales discipline. Has USDA plugged the Chinese commitments into its demand projections? Not as a lump sum, and that is by design. WASDE export forecasts are built by the Interagency Commodity Estimates Committees from observable evidence — weekly FAS export sales and shipments, price competitiveness against South American origins, and historical seasonal patterns — not from diplomatic fact sheets. The claim that “USDA will only include the purchases as they are confirmed” is essentially true as a description of practice, with a nuance: the existence of an agreement informs the committees’ judgment about the demand environment, but unconfirmed political tonnage does not get booked into the balance sheet.
The May WASDE’s first 2026/27 soybean balance sheet illustrates the approach. USDA raised exports 90 million bushels from 2025/26, explicitly framing it as recovery from a year “when tariff measures curtailed shipments to China” — a directional nod to normalization, not a wholesale adoption of the 25 MMT pledge.
Notably, the judgment call can cut the other way, too: traders complained through the winter that USDA was slow to lower its 2025/26 export forecast despite lagging shipments, apparently giving some benefit of the doubt to the Chinese agreement.
USDA’s long-term baseline projections operate the same way, conditioning on “current international agreements” as a scenario assumption while explicitly disclaiming any forecast of political follow-through. A USDA spokesperson has said President Trump “will hold China to its commitments” — but the department’s statisticians will wait for flash sales and export inspections before the numbers move.
Beijing’s July 2 tariff signal. The newest development gives the optimists something concrete. China’s Ministry of Commerce said July 2 that the two sides have agreed in principle to include agricultural products in a reciprocal tariff reduction framework, following recent talks and a phone call between Foreign Minister Wang Yi and Secretary of State Marco Rubio. Ministry spokesperson He Yadong said both governments set a broad goal of expanding two-way farm trade and that China is willing to work with the U.S. to create favorable conditions for bilateral agricultural trade — while pointedly repeating that companies will purchase based on market conditions and demand.
The tariff piece matters more than the rhetoric. U.S. farm goods still carry a residual 10% Chinese levy left over from last year’s tit-for-tat rounds, which has confined buying largely to state-owned enterprises with limited storage and crush capacity.
Market watchers have anticipated a roughly 10-point cut in the soybean tariff, which could bring U.S. beans below the cost of Brazilian supplies and — critically — allow private Chinese crushers back into the market for the first sustained stretch since the trade war reignited. Soybean futures drifted on the news July 2, a fitting metaphor for the market’s posture: encouraged, but unwilling to pay up for promises.
Bottom line: the skeptics have a defensible case built on Phase One history, Brazilian price competitiveness, and a demonstrably slow new-crop sales pace — but their track record includes badly underestimating Beijing’s follow-through on the Busan tranche. USDA, for its part, is doing exactly what it should: treating purchase pledges as context, not data, and moving its export forecasts only as sales are confirmed through FAS reporting. If the reciprocal tariff cuts signaled July 2 are implemented and private crushers re-enter the market, the confirmation could come quickly — and the export line in the WASDE balance sheet will follow the sales, not the summitry. Watch the weekly export sales reports and the flash-sale wire between now and the fall harvest window. That, not the fact sheets, is where this story will be decided.
