U.S. grain futures rallied sharply ahead of tomorrow’s meeting between President Trump and Chinese President Xi, with markets pricing in the potential resumption of large-scale Chinese soybean purchases.
CBOT soybean prices jumped to 1,078 U.S. cents per bushel from 1,006 cents two weeks ago, while wheat climbed to 529 cents from 500 cents over the same period. The strength in U.S. markets filtered into European prices, with Euronext milling wheat and corn both rising by EUR 2/mt.
The rally follows positive signals from U.S. Treasury Secretary Scott Bessent, who indicated that meetings between U.S. and Chinese authorities in Malaysia achieved a “substantial framework.” Bessent stated he anticipates China will resume substantial purchases of U.S. soybeans for several years.
Reuters reported that COFCO may have already purchased around 180,000 metric tons of U.S. soybeans for December and January shipment through Pacific Northwest port terminals.
Implications for procurement strategy
The October 30 meeting creates a decision point for buyers. If trade relations improve, U.S. soybean prices will likely strengthen further, while discounted U.S. beans that European buyers currently benefit from may disappear as the U.S.-Brazil price spread narrows.
Ukrainian and Brazilian soybean prices on FOB both increased by USD 30/mt over the past two weeks, reaching USD 430/mt and USD 445/mt respectively.
However, market participants note that China could manage without U.S. beans by sourcing more from Latin America, while the U.S. would struggle to find a buyer as large as China. Experts warn that even if China resumes purchases, volumes may not be large enough to significantly shift the market balance.
The meeting outcome will determine whether U.S. farmers face large stockpiles that weigh on prices, or whether renewed Chinese demand tightens global soybean markets in the coming months.
This article is part of a more comprehensive grain market analysis. For the full analysis, visit: https://app.vespertool.com/market-analysis/2397