Soybeans Hit $400 in Chicago After China Confirms New Purchases
Following a bilateral meeting between Donald Trump and Xi Jinping, Trump posted that China would authorize “large purchases of soybeans."
Quick overview
- China is set to purchase up to 12 million tons of soybeans by January and around 25 million tons annually over the next three years, providing short-term relief to American farmers.
- Despite the positive announcement, analysts caution that it does not indicate a lasting change in trade dynamics, as soybean futures experienced volatility.
- The agreement merely restores trade flows to previous levels, which have been modest, and offers only a temporary lifeline to producers.
- Long-term outlook remains weak for U.S. soybean farmers, as China's demand has stabilized and is unlikely to rebound significantly.
Trump’s initial announcements had left markets wanting more, but comments from U.S. Treasury Secretary Scott Bessent later clarified that China will purchase up to 12 million tons of soybeans by January—and around 25 million tons annually over the next three years.
The news brought short-term relief to American farmers, though analysts warned it doesn’t signal a lasting change. Soybean futures traded with volatility on the Chicago Board of Trade (CBOT). Following a bilateral meeting between Donald Trump and Xi Jinping, Trump posted that China would authorize “large purchases of soybeans, sorghum, and other agricultural products” from the U.S., adding:
“Our farmers will be very happy! As I said during my first term, farmers should go out and buy more land and bigger tractors.”
Soon after, soybean futures fell 1%, but prices rebounded following Bessent’s remarks, surpassing $400 per ton for November contracts. By press time, November soybeans were up 0.8% to $400.13, while January contracts rose 0.88% to $405.73.
Short-Term Relief for Farmers
The announcement opened the door to a “more normal” trading environment, helping fuel the gains seen earlier in the week. “These price increases on Monday, Tuesday, and Wednesday came from expectations of a deal. Once it was confirmed, investors began taking profits,” one analyst explained.
Still, the agreement merely restores trade flows to their previous pace, which was already modest, offering a temporary lifeline to producers who have nearly completed their harvest.
The Bigger Picture
Analysts agree that, while the move offers short-term relief, the long-term outlook remains weak. Over the past decade—particularly since the 2018 tariff conflict—China has steadily reduced its soybean purchases from the U.S.
Historically, China has imported 24 to 30 million tons of soybeans annually from the U.S., representing a large share of U.S. exports. When those volumes fall, American producers have few alternative markets to turn to.
“The power lies with the importer—in this case, China,” one analyst noted. “We don’t see a strong rebound in China’s soybean demand going forward. It seems to have reached a stable level of around 110 million tons per year.”
In short, while the latest deal brings a momentary boost to prices and sentiment, it does little to alter the underlying structural challenges facing U.S. soybean farmers.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
