Soybean Prices Erase ALL "Trade War Losses" - but Why??

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🌱 Grain Markets This Morning

Soybean futures posted fresh highs overnight. Jan26 pushed above $11.40 for the first time this year, marking the best continuation trade since July 2024. Corn and wheat followed higher — Dec25 corn added a few cents to trade near $4.35 as traders brace for a potential USDA yield cut on Friday. Dryness and disease across parts of the Corn Belt remain key storylines.

📊 Charts below.

🇨🇳 US–China Truce & 2025 Soybean Acres

Market economist Ed Usset (University of Minnesota) says the trade truce is supportive for soybean demand, basis, and planted acreage next year. Soybean futures are at one-year highs, crush demand keeps climbing, and he compared today’s soybean story to early ethanol-era corn demand 15–20 years ago.

Early farm budgets still lean toward corn, but the Dec26 corn / Nov26 soybean ratio has softened with recent rallies in both markets.

📊 Ratio chart below.

🚫 China Has Stopped Buying US Soybeans (Again)

Chinese soybean purchases have paused following a brief round of post-truce buying. There’s growing doubt they’ll meet:

12mmt pledge before Jan 1

25mmt annually over the next three years

China never officially confirmed the commitments, and many analysts see them as more diplomatic than binding. Brazilian soybeans remain cheaper, China’s stocks are comfortable, and US beans still face a 13% tariff.

With the 43-day government shutdown now over, traders will look to tomorrow’s USDA export sales to reveal what (if anything) China bought in recent weeks.

🌾 Friday’s USDA Crop Production & WASDE (11:00am CST)

Expectations heading into Friday:

Corn: Large downward yield/production revision expected, though still record-large crop

Soybeans: Slight cuts to yield and production

Ending stocks: Modestly higher for corn/soy/wheat

Global stocks: Minimal changes expected

USDA skipped the October reports due to the shutdown, so this release covers two months of revisions.

📊 Pre-report estimates below.

🍌 Tariff Talk: Food Imports on the Table

The Trump administration is considering removing tariffs on food items not produced domestically — coffee, bananas, etc. The discussion comes after GOP losses in recent state/local elections where cost-of-living concerns were front and center.

Treasury Secretary Scott Bessent says household costs should ease by the first half of 2026. He also reiterated that no final decision has been made on Trump’s proposed $2,000 tariff dividend.

Many of the affected products are sourced from Brazil, and some traders think the administration may be preparing to drop current 50% tariffs on certain Brazilian imports. Beef imports are being discussed quietly given Trump's recent clash with high beef prices.