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Bloomberg reports:

Some of the most iconic names in U.S. agriculture just agreed to do more business with China. But it's coming at the expense of American farmers as the companies agree to ship more soybeans from Brazil amid Donald Trump's trade war with Beijing.

Cargill Inc., the biggest privately-held U.S. company, as well as its century-old rivals Archer-Daniels-Midland Co. and Bunge Ltd., among others, inked soybean deals with China's state-owned grain buyer this week, the Beijing-based company said on its official wechat account. Under the agreement, the crop will be sourced from South American countries including Brazil, Argentina and Uruguay.

China slapped a retaliatory 25 percent tariff on American-grown supplies of the oilseed in July. This week's agreement shows how the largest agricultural trading houses are working through the trade war. It also reflects the measures that China, the largest global soy importer, is willing to take to avoid U.S. beans.

It's all adding up to bad news for American farmers. On Thursday, the U.S. Department of Agriculture's World Agricultural Supply and Demand Estimates report showed domestic inventories will be bigger than projected last month as it cut its outlook for exports.

While that's "incrementally negative for U.S. farmers" and the companies that sell them equipment, it's "generally positive" for the processors like Cargill and ADM, Ann Duignan, an analyst at JPMorgan Chase & Co. in New York, wrote in a report Thursday.

Cargill didn't immediately respond to messages seeking comment. ADM didn't immediately comment. Bunge declined to comment.

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