China’s soybean purchases are likely to weaken in the coming months as poor animal-feed demand, elevated inventories and negative crushing margins reduce the incentive to import. Soybeans were excluded from proposed tariff reductions for a broad range of U.S. farm products after talks between Chinese President Xi Jinping and US President Donald Trump, leaving US beans subject to an additional 10% tariff imposed since the trade war began last year. Private Chinese processors have largely secured supplies through the Lunar New Year in early February from Brazil, Argentina and state reserves. Chinese state-run companies have bought about 13.7 million metric tons of US soybeans since a May trade deal, but private crushers have purchased only South American cargoes. Brazilian soybeans were priced at about $590 per ton, including cost and freight, on a tariff-excluded basis comparable with US cargoes, while their typically higher oil content makes them more attractive to processors. Chicago soybean futures have fallen 1.5% this week and could face further pressure as the US harvest approaches its peak and Chinese buying slows. Margins for November shipments from the US Pacific Northwest and Gulf were negative by 120 yuan ($17.90) to 200 yuan ($29.83) per ton, compared with about minus 120 yuan for Brazilian beans. Crushers in Rizhao were losing 33.54 yuan per ton on Tuesday. Soybean inventories at 111 Chinese crushing plants reached 7.96 million tons in the week of September 25, the highest in at least 15 years, while only 37.3% of 514,000 tons offered in Sinograin’s latest import auction was sold. Buyers booked about 50 cargoes in the first three weeks of September, the fewest in four years. Unless margins improve, commercial buyers are unlikely to book more overseas cargoes and may instead use reserve auctions or leave plants idle for maintenance.