Chinese processors may buy up to 10 million metric tons of soybeans from the two South American exporters during the 2025/26 marketing year ending next August, which would be a record, said the sources, a Singapore-based trader at an international company which sells soybeans to China and a second person who trades soybeans for China.

Why it matters: Between 2016 and 2024, the U.S. share of China’s agricultural imports have declined from 20 per cent to 12 per cent. This seems to be set to drop again.

They have already booked 2.43 million tons from Argentina and Uruguay for shipment from September to May next year, the sources said.

From September 2024 to July 2025, China imported 5 million tons of soybeans from the two countries, according to data from the General Administration of Customs.

The rise in supply from the two Latin American producers will add to large imports from Brazil to China, dealing another blow to U.S. exporters as the world’s biggest soybean importer reduces its dependence on U.S. farm products.

With more soybean suppliers to China, the country will need less from the U.S., which will help in the trade war, said the Singapore-based trader.

This year, China has not booked any U.S. soybean purchases for shipment in the fourth quarter, which is typically the key sales period for the United States as freshly harvested supplies reach the market.

The world’s top two economies have imposed tit-for-tat import tariffs that have taken a toll on commerce, particularly agricultural goods such as soybeans.

By mid-August, Chinese buyers had booked 1.575 million tons for September loading from Argentina and Uruguay, 660,000 tons for October, and smaller volumes of 66,000 tons each for November, December, and May 2026, the traders said.

Since the trade war with China in U.S. President Donald Trump’s first term, Beijing has taken steps to reduce its reliance on American farm goods to bolster its food security.

The U.S. supplied 12 per cent of China’s agricultural imports in 2024, down from 20 per cent in 2016, while Brazil supplied 22 per cent last year, up from 14 per cent in 2016, according to Chinese customs data.

The second trader said the higher imports from Argentina and Uruguay are primarily because China is not buying U.S. beans and also because both countries have had bumper harvests.

Argentina’s 2024/25 soybean harvest was 50.9 million tons, U.S. Department of Agriculture data showed, up from 48.2 million tons a year ago and 25 million tons in 2022/23 when a severe drought curbed yields.

In Uruguay, soybean output was 4.2 million tons in the 2024/25 period, up from 3.3 million tons a year ago, the USDA data showed.

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The agreement was reached after 25 years of negotiations, in Uruguay’s capital, Montevideo, that were attended by the President of the European Commission, Ursula von der Leyen, and the leaders of Argentina, Uruguay, Paraguay and Brazil, the four member states of the South American bloc.

The deal still faces a lengthy process to be ratified and go into effect, which could take years. It could get blocked with France a staunch opponent, in part over fears of increased South American farm goods arriving in Europe.

“Any market opening is favorable, I think it’s an opportunity, but you have to look at the fine print, what the conditions are,” Carlos Castagnani, president of the Argentine Rural Confederations, told Reuters.

“We have to ensure that our way of producing is respected.”

Argentina is the world’s top exporter of processed soy, the no. 3 for corn, and a key supplier of wheat and beef.

South American farmers and exporters are keen to have greater access to the huge European market. However, fears that environmental clauses will limit trade and opposition from some EU countries to the agreement have dampened expectations.

Among the European demands are limits on the use of genetically modified seeds and deforestation, which have been common practices in South America in recent decades.

Argentina’s grain exporters and processors’ chamber CIARA-CEC said that while the agreement was a positive step for the bloc, its real impact would not be immediate.

Products such as oil or biodiesel, will only see significant tariff reductions starting in seven to ten years, CIARA-CEC president Gustavo Idigoras told Reuters.

Argentina was over a decade ago the world’s largest supplier of biodiesel, but was hit badly by European tariffs and other protectionist measures.

The agreement is important for South America’s producers to stay competitive, with major economies around the world threatening protectionist policies, said Pedro Galli, member of the Rural Association of Paraguay, a key soybean exporter.

However, Hector Cristaldo, president of the Union of Production Guilds, the main association of Paraguayan soybean producers, called for calm as the final text gets finalised and emphasized the complexity of the process that awaits the deal.

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In a press conference to discuss the global sanitary hazard, Brazilian Agriculture Minister Carlos Favaro said Brazil, the world’s biggest chicken exporter, would bolster measures to prevent outbreaks as the virus continued to spread.

Until now, bird flu cases had been detected in commercial farms in Bolivia, which borders Brazil, and in Peru and Ecuador, Favaro said.

On Wednesday, cases in wild birds were confirmed in Uruguay and Argentina, sparking a health emergency in both.

In recent days, Brazil also investigated suspected cases of the highly pathogenic bird flu.

The suspect cases occurred in wild birds in Rio Grande do Sul state, where many Brazilian meatpackers operate, and in domestic birds, ducks and chickens with bird flu symptoms in Amazonas state, according to the minister.

None of the suspect cases turned out to be avian influenza, he said.

Avian flu, which has reached new corners of the globe, has become endemic for the first time in some wild birds that transmit the virus to poultry, experts said.

Canada, for one, has been reporting new cases of highly pathogenic H5N1 avian flu in domestic and wild birds since late 2021. Out of the nine provinces reporting cases in domestic birds since then, outbreaks so far this month have included six commercial barns in Quebec and a “non-commercial, non-poultry” flock in Nova Scotia.

Among the 47 U.S. states reporting high-path H5N1 cases in domestic birds since early last year, outbreaks have been reported in at least one domestic flock each in 19 states in the past 30 days.

The virus has spurred import bans in some countries and pushed egg prices to record highs in some parts of the world.

Brazil is home to some of the world’s biggest meatpackers, including BRF and JBS. It has never registered a bird flu case.

But since late last year, the Brazilian meat industry has been on high alert. Most of Brazil’s chicken processors operate in southern states, making the discoveries in Uruguay and Argentina worrisome.

“It should be remembered that the situation in Uruguay (affecting wild birds) is an example of a case that would not suspend trade and exports of poultry products, in accordance with recommendations established by the World Organization for Animal Health,” Brazil’s meat lobby ABPA said in a statement.

The Uruguayan government declared a state of national sanitary emergency after detecting bird flu in five dead black neck swans between the departments of Maldonado and Rocha.

“It’s very important to isolate wild birds from domestic birds, especially sources of food and water”, Virginia Russi, a technician from the agriculture ministry of Uruguay told a news conference.

Argentina’s Agriculture Secretary Juan Jose Bahillo also confirmed its first cases of bird flu in wild birds, leading it to declare a sanitary emergency and reinforce measures against the disease.

— Reporting for Reuters by Ana Mano in Sao Paulo, Maximilian Heath in Buenos Aires and Victor Borges in Brasília; additional reporting by Nayara Figueiredo. Includes files from Glacier FarmMedia Network staff.

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The Uruguayan shearers come to Spain every year, where farmers value them for their skills, their speed and particular care for the animals’ wellbeing. This year the pandemic delayed their arrival by about a month to mid-May, leaving the sheep in urgent need.

The shearers are so prized in Spain, that farmers chipped in to charter a plane for the Uruguayans after border closures, flight cancellations and restrictions on movement threatened to leave them unable to make the journey.

The farmers, who even asked the Spanish King for help, convinced the government to authorize their stay after the Uruguayans underwent medical tests before flying.

Federico Ventura is one of the workers each shearing around 10,000 sheep over a 70-day campaign in the northern region of Castilla y Leon. They use special machines and an animal restraint technique that further speeds up the process.

“I’ve been coming here for six years. Because of the coronavirus, everything was delayed, but we’re moving at a good pace,” Ventura told Reuters at a farm in Villafale, around 300 km northwest of Madrid.

The Spanish season is crucial to his livelihood.

“With the 70 days here we live for a year in Uruguay.”

Three or four shearers can shear 750 sheep on a farm in just one day, while with less skilled workers it could take up to a month, said farm owner Angel Leon. The Uruguayans earn 1.5 euros (C$2.29) plus tax per animal.

“Had they not come, we would not have been able to shear,” said farmer Jose Moran, one of those to help fund their flight.

— Reporting for Reuters by Juan Medina; additional reporting and writing by Emma Pinedo.

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Marfrig also said it was seeking to sell an existing U.S. unit, Keystone Food. The proceeds will be used to repay US$1 billion in loans it is taking out to finance the acquisition, which involves Marfrig obtaining 51 per cent of National Beef, the United States’ fourth-largest beef processor.

National Beef’s cattle slaughter and primary beef processing operations are at Dodge City and Liberal in southwestern Kansas, about 130 km apart and billed as two of the “highest volume and most efficient” packing plants in the country.

According to Marfrig, National Beef’s two slaughter plants together are able to process up to about 12,000 head of cattle per day, accounting for about 13 per cent of U.S. slaughter capacity.

The deal helped propel Marfrig shares as much as 19 per cent higher on Monday. Analysts said the resulting company would be less indebted and better positioned to profit in the global market for beef products.

However, U.S. agriculture antitrust group the Organization for Competitive Markets lamented the increasing involvement of non-U.S. companies in the country’s beef trade.

“These foreign corporate giants will dominate the U.S. beef market, putting U.S. farmers and ranchers at their mercy,” it said in a statement.

The transaction will also give Marfrig broader access to the U.S. market almost a year after the U.S. banned imports of fresh Brazilian beef over safety concerns.

“It’s more of the same trend of these companies consolidating and the appetite for Brazil to diversify into the United States,” said Altin Kalo, a livestock analyst at Steiner Consulting Group.

“Brazil has faced barriers to sell beef into the U.S. and this is just one way to get exports to the U.S. If you can’t sell beef here, come in and buy a U.S. company.”

Marfrig CEO Martin Secco told a news conference in Sao Paulo that he hopes the U.S. will lift the ban by the middle of this year. Currently Marfrig supplies the U.S. market with fresh beef it produces in Uruguay, he said.

Uruguay has a quota to export 20,000 tonnes of fresh beef to the U.S. without any tariffs, and Marfrig accounts for 25 per cent of that, Secco said.

Brazilian investment bank BTG Pactual said in a research note that the deal would make Marfrig “a more focused and less leveraged protein operator, with a highly diversified beef footprint in South America and the United States.”

Chief financial officer Eduardo Miron said Marfrig doesn’t see antitrust concerns arising from its proposed acquisition of National Beef due to Marfrig’s small presence in the U.S. market.

The company said it expects to complete the sale of Pennsylvania-based Keystone, a processor of poultry and fish as well as beef, in the second quarter.

National Beef’s current majority shareholder, New York holding company Leucadia National Corp., today holds 79 per cent interest.

The deal with Marfrig would cut Leucadia’s stake to 31 per cent, with cattle producer association U.S. Premium Beef holding 15 per cent. The deal also calls for Leucadia and other shareholders to hang onto their stakes for at least five years.

— Reporting for Reuters by Ana Mano; additional reporting by Gram Slattery and Marcelo Teixeira in Sao Paulo and Tom Polansek and Michael Hirtzer in Chicago. Includes files from AGCanada.com Network staff.

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Federal Judge Ricardo Leite blocked JBS’s US$300 million sale of the unit to rival Minerva SA, citing a corruption scandal ensnaring JBS’s controlling Batista family, court documents seen by Reuters showed on Wednesday.

In a separate decision, the attorney general’s office urged state auditors to freeze assets of JBS and the Batistas, who own 42 per cent of JBS. The move guarantees that funds reimbursing state lender BNDES for faulty dealings with JBS will be preserved, the attorney general’s office said in a statement.

Common shares in JBS surged 4.3 per cent, while those of Minerva reversed early gains on the judge’s decision. Minerva’s stock shed 2.7 per cent to 11.52 reais as of 4:20 p.m. local time.

Leite, the judge, sits on the court that will review a leniency deal the Batistas reached with prosecutors, and his decision highlights the legal risks for the meatpacker and its founding family.

Last month, Prosecutor-General Rodigo Janot reached a plea agreement with billionaire brothers Wesley and Joesley Batista to avoid prosecution if they turned in 1,893 politicians involved in a bribery scheme.

A separate leniency deal between the Batistas and federal prosecutors was signed on May 31, requiring the family to pay a 10.3 billion reais (C$4.1 billion) fine over 25 years.

The terms of the plea agreement have drawn intense scrutiny after the Batistas alleged that President Michel Temer took part in a bribery scheme, threatening to topple the president and sink his reform agenda.

Leite said in his ruling that the deal to sell JBS beef plants in Argentina, Paraguay and Uruguay could harm the corruption investigation.

In a separate statement Wednesday on the suspension of the beef plants’ sale to Minerva, JBS said it “will take the necessary legal measures in order to appeal the decision.”

— Reporting for Reuters by Lisandra Paraguassu and Cesar Raizer; writing by Marcelo Teixeira and Brad Haynes. Includes files from AGCanada.com Network staff.

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JBS will use proceeds from the transaction to cut debt, according to a securities filing on Tuesday. The deal has already been approved by the boards of both companies.

Minerva said in a conference call it will pay US$280 million in cash at the closing of the transaction, which is expected in July. The balance will be paid after the conclusion of due diligence.

The agreement is the first by embattled JBS since its founders admitted to paying bribes to politicians in exchange for favours in a scandal that threatens to topple President Michel Temer.

J+F Investimentos, JBS’ parent company, has signed a leniency agreement and will pay 10.3 billion reais (C$4.2 billion) for its role in the crimes admitted by the Batista family, who control the group.

Weakness at JBS’ Mercosur division as well as a stronger Brazilian currency contributed to a 14.3 per cent drop in the company’s net revenue in the first quarter.

Minerva increased its net revenue estimate to a range of 13 billion reais to 14.4 billion reais in the 12 months ending June 2018, it said, to account for a 52 per cent increase in slaughtering capacity after the acquisition.

Minerva common shares rose 5.2 per cent, touching a four-month peak, while JBS shares advanced three per cent.

JBS had experienced difficult operating conditions in Argentina. It entered the country in 2001 as it began an international expansion. By 2005, it had five beef processing plants there.

JBS opted to close some of them around 2012 as a result of exporting quotas imposed by then-president Cristina Fernandez, who wanted to limit sales abroad to boost domestic supplies and try to control meat prices.

Minerva explained that of the five plants acquired from JBS in Argentina, four are closed and will remain so until market conditions improve there.

All plants bought from JBS have certification to export to the U.S., Japan and China, Minerva said.

The transaction with Minerva is subject to regulatory approval and the final price will be adjusted by the amount of working capital left at the acquired units, according to filings from both companies.

— Reporting for Reuters by Ana Mano in Sao Paulo.

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The Canadian Food Inspection Agency said Wednesday that samples tested at its National Centre for Foreign Animal Disease in Winnipeg have confirmed the virus’ subtype and severity.

The farm, in Oxford County west of Woodstock, was quarantined Monday, after tests the previous day at the University of Guelph’s animal health lab came back with presumptive positives for an H5 strain of the avian flu virus. In its report Wednesday to the World Organization for Animal Health (OIE), the CFIA said the farm had reported “sudden high mortality” in its birds over a 48-hour period.

A neighbouring farm, deemed to be at risk but with no confirmed cases of the virus, was also quarantined Monday.

Six other “at-risk” farms within a five-kilometre area were quarantined Tuesday, followed Wednesday by another farm found to have had “high-risk contact” with the infected index farm.

Out of 44,800 turkeys at the index farm, 34,000 are still alive but will be euthanized with carbon dioxide gas in the next few days, Paul Mayers, CFIA’s vice-president for policy and programs, said on a conference call Wednesday.

It’s possible that more “at-risk” farms will also be found over the next few days, he said. Agency officials couldn’t immediately say Wednesday how many of the other eight quarantined farms are also turkey operations.

The strain is the same H5N2 virus that infected birds at a dozen farms in British Columbia’s Fraser Valley in December and has been confirmed in birds at 22 farms in nine U.S. states since January. The B.C. farms have since been depopulated of birds, cleaned, disinfected and released from quarantine.

However, the Ontario case delays Canada’s bid to regain its status as free of high-path avian flu, as per OIE standards. Canada, until this week, had been on track to seek avian flu-free status starting around June 3.

Hong Kong, Uruguay

Federal officials couldn’t immediately say Wednesday whether countries that blocked poultry or poultry products specifically from B.C. or from the Fraser Valley have moved to lift those bans.

However, Mayers said, 10 countries — South Africa, St. Vincent and Grenadines, Dominica, Singapore, Australia, the United Arab Emirates, Guatemala, Brazil, Morocco and South Korea — continue to have bans in place against imports of poultry and/or poultry products from anywhere in Canada stemming from the B.C. outbreak.

Also, in view of the Woodstock case, Hong Kong has now restricted imports of poultry and poultry products from Oxford County, he said. Taiwan and Japan this week also imposed bans on Ontario poultry and poultry products.

Uruguay has now also imposed a ban on imports of hatching eggs from anywhere in Canada, he added.

“It’s certainly our view that countries can limit their (trade restrictions) to the specific area” of an avian flu outbreak within Canada, Mayers said.

Canada recognizes, however, that not all countries will take that approach, he added.

U.S. officials have previously noted outbreaks of H5N2 have now taken place in the Pacific, Central and Mississippi flyways — separate migratory paths for birds over North America.

On most maps, southwestern Ontario is on the eastern edge of the Mississippi flyway but also on the Atlantic flyway. In its latest report Wednesday to the OIE, the CFIA said it was possible that migratory birds from the Mississippi flyway brought the virus to the region, noting wild ducks, geese and swans had been seen around the farm in the last 30 days.

Mayers said Wednesday the CFIA urges poultry producers to follow enhanced biosecurity measures and take precautions in all areas, not just those under a given flyway. — AGCanada.com Network

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