Markets Rise on talk of U.S.- China Trade Truce and a USDA Crop Report Update
On the weekly Ag Commodity Corner+ Podcast with experts Farms.com Risk Management Chief Commodity Strategist Moe Agostino and Commodity Strategist Abhinesh Gopal, the team discussed key commodity market drivers and agreed that the markets moved positively the week of February 10 to 13, after discussions indicated the United States and China might extend a trade truce, the news relieved markets concerned about escalating trade tensions.
“USDA took Trumps comments that China would buy more U.S. soybeans seriously and headline news that the U.S./China trade truce would be extended when Trump/Xi meet in the first week of April was a BIG WIN for soybeans this week!” says Agostino.
The USDA February crop report supported soybeans as a major winner. China may increase purchases from 12 to 20 million metric tons, providing further demand and potential reductions in ending stocks.
Corn ending stocks fell unexpectedly by 100 million bushels, showing bullish signs, though the total remains large at 2.1 billion. Soybean numbers were close to expectations but could have been much worse, and wheat stocks were lower than expected.
South America showed little change, except for Brazil’s growing soybean crop, projected at 180 million metric tons. Argentina’s crop conditions are declining, but it is too early to reduce production forecasts. Rainfall forecasts may improve crop growth.
Soybean futures received an additional boost from expectations that US-China trade talks in April will extend the truce by a year. Political buying by China, rather than economic factors, is driving recent spikes. Markets reacted strongly, with July soybean futures approaching the old resistance from November 2025.
Ethanol demand is rising due to US 45Z tax credits and biofuel incentives. Ethanol plants investing in carbon capture and storage could see substantial profits, indirectly benefiting local farmers through higher demand and stronger basis prices.
Input costs remain a concern. China has restricted phosphate fertilizer exports until August 2026, tightening global supply and raising prices. Farmers are advised to secure supplies early.
Wheat futures also rose, influenced by technical market signals and short covering by funds. Corn exports remain strong, supported by quality issues in northern China, driving purchases of US sorghum and barley. Could U.S. corn be next?
Speculative funds are adding long positions in soybeans and canola, while wheat remains under pressure. Market trends suggest that soybeans remain in a strong upward trajectory.
Agostino and Gopal are advising farmers to follow the trend and be patient so they can capitalize on higher prices. Markets may see corrections, but the overall momentum remains positive.
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