U.S./Japan Trade Deal A Win for Farmers and Markets Long-term
On the weekly Farms.com Ag Commodity Corner+ Podcast, Farms.com Risk Management Chief Commodity Strategist Moe Agostino and Commodity Strategist Abhinesh Gopal shared market insights for the week of September 1 to 5, 2025.
Their discussion focused on Japan’s new U.S. trade deal, concerns about crop disease, and the possible return of a long-term drought cycle.
The week ended with corn futures gaining 8 cents, holding above a new support level of $4.14. Soybeans slipped below $10.30 on weak export concerns, from a lack of Chinese buying.
In Canada, Canola faced harvest pressure but the announcement by the Canadian government of a $370 million biofuel production incentive should be supportive.
Meanwhile wheat and cotton hit new lows.
Lean hogs surged, funds took profits in cattle futures, and milk prices slipped on the week.
Outside agriculture, the S&P 500 closed above 6,500, crude oil weakened below $65, and gold reached record highs.
A major highlight was the Japan trade deal, which could double Japan’s U.S. corn/soybean imports and boost ethanol and meat purchases. Agostino noted this is “a big win for U.S. farmers” despite ongoing tariff disputes and legal challenges over presidential powers to impose tariffs.
Weather and disease were also key topics. Southern rust has severely impacted corn in Iowa and Southern Minnesota, cutting yields by 25 to 50 bpa. With the extreme dryness in the Eastern Corn Belt, it could signal the start of the 89-year drought cycle, raising long-term risks for 2026.
Technical levels for corn futures placed support at $4.14 and resistance near $4.3325, with USDA yield adjustments expected later in the fall after the combine starts rolling. Energy markets also drew attention, as OPEC+ is expected to increase output at Sundays meeting.
Agostino and Gopal concluded by emphasizing that while government support programs in the U.S. and Canada provide short-term relief—such as Canada’s $370 million biofuel incentive—farmers will continue to face uncertainty until the 2025 harvest is complete.
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