Soybean futures extended their rally Wednesday, climbing 0.7% to $10.53¼/bushel—near Monday’s two-month high—as traders bet on easing U.S.-China trade tensions after Treasury Secretary Scott Bessent signaled potential negotiations. Corn and wheat also edged up, though gains were tempered by favorable U.S. planting weather and EU crop forecasts.
Market Drivers
- Trade Optimism: Bessent’s closed-door remarks about a “de-escalation” in U.S.-China tensions fueled hopes for renewed soybean exports to Beijing, the world’s top buyer.
- Corn Stability: Prices rose 0.2% to $4.84/bushel as forecasts showed limited Midwest rain, allowing uninterrupted planting.
- Wheat Wobbles: A 0.1% gain to $5.50½/bushel followed a mixed EU crop report—yield forecasts rose slightly, but northern dryness risks lingered.
Behind the Moves
- Fund Activity: Commodity funds were net soybean buyers but sold corn and soymeal contracts Tuesday.
- Global Context: China’s soybean demand remains pivotal, while the EU’s soft wheat outlook faces climate threats.
What’s Next?
- Trade Watch: Any formal talks between Washington and Beijing could trigger further soybean rallies.
- Weather Risks: Prolonged U.S. dryness may boost corn prices, while EU wheat needs rain.
- Earnings Focus: Market sentiment remains tied to corporate results amid Fed policy uncertainty.
Why This Matters:
- Farmers’ Bottom Line: Sustained soybean price recovery could revive U.S. export hopes after a dismal 2024.
- Global Grain Flow: EU wheat adjustments may redirect trade dynamics if yields disappoint.
- Macro Jitters: Bessent’s “slog” warning tempers optimism, leaving markets volatile.
Data Point: Every 1M-ton increase in Chinese soybean imports typically lifts CBOT prices ~2%.
Soybeans Extend Gains on US-China Trade Hopes; Corn and Wheat Edge Higher