Soybeans and corn ease back early Wednesday with wheat, cattle and hogs higher.
Soybeans Ease Despite China Buys
Soybeans saw a pause with light profit taking early Wednesday after a nearly 30-cent rally in prices so far this week.
Lane Akre, economist with Pro Farmer, says soybeans have priced in the optimism about a China trade deal being announced on Thursday and also had muted reaction to news of the first China soybean purchases of the 2025-26 marketing year.
Sources reporting that China’s COFCO bought three cargoes of soybeans from the U.S. totaling 180,000 MT or 6.6 million bushels through the Pacific Northwest. Akre says these are a goodwill gesture by China. “They did something pretty similar back in the 2018, 2019 trade talks. They bought four cargoes basically the day before negotiations then. So this is, you know, it’s a part of their playbook,” he explains.
However, he says these are also value buys as U.S. soybean prices are now attractive with the tariffs being lowered.
“It’s also key to remember that U.S. soybeans are pretty competitive on the world market right now. Brazil knew that they were the only game in town for China soybeans for a long time. And the premiums and five prices reflected that. And US prices are still fairly competitive. And, you know, if they got the green light to start buying U.S. beans, I think that’s a good sign and could point to some agreement being made.”
Best Case Scenario for China Deal
Speculation is running high on the details of the China deal to be signed by the two presidents on Thursday. Akre says market analysts say China needs soybeans for December and January and the U.S. could fill that need at a minimum.
Akre says, “The market seems to be pricing in about 10 million metric tons. That’s what the rumor mill is saying right now. So that’d be about 360 million bushels.”
Akre says a portion of that is already figured into USDA’s 1.685 billion bushel export estimate in the September WASDE.
“But the U .S. balance sheet with 81 million planted acres and the yield that’s probably going to come in below where USDA is at at that 53 and a half, it’s going to be more limited by supply than it is demand. And at some point, prices are going to need to start rationing some of this export demand, in my opinion. I mean the balance sheet is already tight with where USDA is at with including their September stocks report its about 288 million bushels.”
And that ending stocks figure doesn’t include any cuts in national soybean yield, which Akre says are likely.
“We’re looking at ending stocks at about 250 million bushels and that’s the tightest level we’ve seen in several years and we’re $3 below where we were when ending stocks were that tight and the market really hasn’t reflected that. I think a lot of that has been some skepticism about what demand’s going to be, what exports are going to be,” he adds.
He thinks soybean demand is strong enough to support that lower ending stocks figure but that doesn’t suggest a $3 rally in soybeans because of the big crop in South America. Akre adds that even if China only buys 350 million bushels of soybeans for this marketing year, other export customers can back fill the difference.
Corn Following Soybeans?
Corn is also easing slightly on Wednesday following the pause in soybeans and Akre thinks corn will continue to be hinged to that market.
He doesn’t expect China to buy corn in the trade agreement but says if China would return to buy sorghum that would be very helpful for the corn market. Plus, higher soybean prices will likely mean a battle for some acres with corn.
Wheat Sees Short Covering
Wheat futures were slightly higher after a strong technical close on Wednesday but Akre says much of the rally has been short covering by the funds.
However, he does acknowledge that some of the agreements and frameworks announced this week with Southeast Asian customers, including Japan, are giving the demand bulls some fodder.
Cattle See Recovery Rally But Will Funds Use it to Sell?
Cattle futures are seeing a nice recovery rally on Wednesday after getting beat up the last six sessions on fund liquidation and concerns about President Trump’s plan to lower beef prices.
Akre says the market was also concerned about Mexico’s Ag Minister coming to the U.S. to ask for the border to be reopened to Mexican feeder cattle. However, he thinks that is unlikely and Reuters reported shortly after this interview that the Mexican Ag Minister confirmed he had spoke to USDA Secretary Rollins and there was no date for resuming cattle exports to the U.S.
He also points out that even with the crash in futures the fed cattle market was only down around $2 last week and early sales this week were near $230.
