China's soybean imports from US to increase following the trade agreement

On December 13, China and the United States reached an agreement on the first phase of the trade agreement, under which China will significantly increase imports of agricultural products from the United States, including soybeans, wheat, corn and rice.
About 85% of China's soybean demand relies on import, and the United States is one of the major sources. Since the trade conflict between China and the United States broke out in April 2018, China's import of US soybeans has decreased significantly. From January to November 2019, China's soybeans import volume was 7.0425 million tons, of which US soybeans accounted for 17.61%. We expect US soybean imports to recover and o return to around 2017 level by 2020/2021
 
China is the largest export market for US soybeans. After China imposed a 25% import tariff on American soybean, the theoretical cost of American soybean import rose by 700-800 yuan, and US soybean gradually lost its market competitiveness, resulting in a sharp decline in US soybean exports to China in 2018-2019. The main contract price of CBOT soybean futures also fell sharply from above 1,000 cents per bushel to around 812.2 cents per bushel at one point, below the production cost of US soybean farmers. In addition, in the face of adverse sales, US soybean farmers have chosen to increase soybean stocks, adding additional costs and risks.
 
In the future, the increase of China's soybean purchase from the United States will on the one hand solve the existing problems of the United States soybean sales, on the other hand, will to some extent raise the price of the United States soybean, ease the economic pressure faced by the United States soybean farmers.