Soybeans fell sharply in Chicago after being excluded from the US-China agreement

American farmers' hopes for a new deal with China to increase American soybean supplies did not materialize as we predicted , causing a sharp pullback in soybean quotes and dragging down other grain markets.

Following the meeting of the leaders of the United States and China, the parties agreed on tariff relief for goods worth a total of about $60 billion in mutual trade and extended the trade truce until January 10, 2027. Each party identified approximately $30 billion in non-sensitive goods for which a more favorable tariff regime is provided.

 

China plans to reduce tariffs on a range of U.S. agricultural products, including corn, wheat, sorghum, meat, dairy products, vegetable oils and meals. However, soybeans, which remain a key U.S. agricultural export to China, are not included in the list.

 

The new terms are expected to improve access to the Chinese market for about 30% of US exports to China. Analysts estimate that in monetary terms, the agreements cover about 11% of annual US imports and more than 25% of exports. The parties will also create a separate working group to further discuss market access and regulatory issues.

 

November soybean futures in Chicago fell 2.4% to $473.4/t on Monday, completely erasing the gains of the past month (0% for the month). We expect that pressure may increase over the next two weeks amid acceleration of soybean harvest in the US and very favorable rainfall before the start of the planting season in Brazil.

 

After active speculative buying last week, investors also began to reduce positions in other agricultural markets. December wheat futures in Chicago yesterday fell by 2.2% to $253.1/t (-5.5% for the week and -12.5% for the month), and corn futures fell by 1% to $205.9/t (-3.8% for the week and -2.9% for the month).

 

Analysts do not yet expect China's private purchases of American soybeans to fully recover to the levels observed before the escalation of the tariff confrontation. At the same time, Chinese state-owned companies have already purchased more than 12 million tons of American soybeans, while the White House's stated target is 25 million tons per year by 2028.

The issue of access for American soybeans to the Chinese market will remain important both for the US agricultural sector and for further trade negotiations ahead of the midterm congressional elections on November 3, 2026.