Tariffs, Trade Truces, and Yield Uncertainty Keep Ag Markets on Edge Ahead of Key USDA Report
The agricultural markets are holding their breath as two major forces converge: China’s evolving trade stance and the upcoming USDA crop report on November 14. After a week marked by cautious optimism and lingering skepticism, traders and producers alike are watching for signs that could shift the trajectory of corn, soybean, and livestock prices.
China’s Tariff Tweaks: Symbolic or Substantial?
Last week’s U.S.-China trade truce sparked initial enthusiasm, especially with China lowering some agricultural tariffs. However, soybeans remain subject to a 13% tariff, keeping U.S. exports uncompetitive compared to Brazil. Despite this, China has been buying U.S. wheat and sorghum, and rumors suggest they may be purchasing soybean futures rather than physical beans.
This, according to the Ag Commodity Corner+ Podcast by Farms.com, with Risk Management experts Moe Agostino and Abhinesh Gopal, during their podcast covering November 3 to 7.
“The market was disappointed,” said Agostino. “We were hoping for more clarity or a full removal of tariffs. But don’t forget, COFCO Corporation (China National Cereals, Oils and Foodstuffs Import & Export Corporation) COFCO—the Chinese state trading agency—can waive tariffs if needed. If China wants beans, they’ll find a way to buy them.” Maybe they were buying under the radar while the U.S. government was shutdown ahead of the trade truce?
USDA Crop Report: A Potential Market Mover
The second major factor is the USDA’s November crop report. With wide-ranging yield estimates—corn between 178 and 186 bushels per acre, soybeans from 50 to 53—the market is bracing for a potential bullish surprise. If the USDA lowers ending stocks and yields without adjusting export forecasts, prices could break above key resistance levels: $4.35 for corn and $11.35 for soybeans.
“There’s a gap in soybean futures around $11.34,” Agostino noted. “If we break above that, it’ll likely be because of this report.”
Dan Quinn, Assistant Professor, Corn Production for Purdue University, has surveyed ten states, suggests yields could be significantly lower than last year due to dry finishes and disease pressure. South Dakota and North Dakota might be up, but most other states are down. He suggests corn yields could drop to 178, and soybeans to 50 but that may take until the January crop report.
Livestock and Broader Market Sentiment
While grains showed resilience, livestock markets drifted lower. Hogs continued to sell off, and cattle may be nearing oversold territory. Broader market sentiment was risk-off by week’s end, with stock markets dipping on concerns over AL valuations and traders awaiting earnings from major tech firms like Nvidia.
Political Clouds and Trade Uncertainty
Adding to the uncertainty is the potential U.S. Supreme Court ruling on Trump-era tariffs. While the odds of overturning them are high, the administration has a backup plan to maintain them. Meanwhile, the U.S. government shutdown—now the longest in history—casts a shadow over economic stability and could stretch into Thanksgiving.
Looking Ahead
Despite the lack of a signed trade agreement, Agostino remains cautiously optimistic. “We’ve waited a year for this. It’s a win. We could see 12 million metric tons of soybean exports by year-end, and 25 million next year.”
With the USDA report looming and China’s intentions still unclear, the markets are in a “wait and see” mode. But one thing is certain: the next few weeks could be pivotal difference between a n early Christmas gift or more coal for farmers.