Wheat loses momentum, as markets assess outcome of US-China talks
• Soybeans rebound from early selling, on reports of Chinese commitments to buy from the US
• Wheat mixed. A firm dollar helps depress Chicago prices, but London trades marginally higher
• Rapeseed edges higher in Paris to fresh two-month highs
Wheat prices sagged, weighed by farmer sales and profit-taking, although traded above early lows on reports of substantial soybean trade agreed at the meeting between US President Donald Trump and China’s Xi Jinping.
Grain markets headed lower after first reports of the summit revealed sparse details of commitments by China, the top food importer, to resume buying ags from the US, a leading exporter.
While Mr Trump said that China would buy “tremendous amounts” of US soybeans and other ags, “starting immediately”, the comments failed to reassure the soybean market, which has been particularly sensitive to US-China relations given the countries’ high standing in trade in the oilseed.
However, Chicago January-26 soybean futures, having sunk 2.2% in early deals, rebounded to show 1.4% headway, after US Treasury Secretary Scott Bessent said that China had agreed to buy 12Mt “this season”, and 25Mt annual for the next three years.
Although 12Mt would amount to less than half the volume of US soybeans that China has on average imported per year over the past decade, 25Mt would be close to typical levels.
“So our great soybean farmers, who the Chinese used as political pawns - that’s off the table, and they should prosper in the years to come,” Mr Bessent told Fox Business Network.
The recovery in soybeans encouraged some recovery in cereals too. Chicago December-25 corn futures pared losses to 0.5%, while wheat futures recovered a little to show a 1.2% decline.
Headway in the dollar - which gained 0.4% against a basket of currencies after Federal Reserve chair Jerome Powell said overnight that financial markets should not assume another US interest rate cut during 2025 – provided a headwind, in making US exports less competitive.
Sales by farmers. who have been awaiting improved prices, were also viewed as weighing especially on wheat.
However, European wheat proved more resilient, having underperformed in the last session, and finding some support by losses in the euro and, especially, sterling against the dollar.
Paris milling wheat futures for December-25 traded 0.4% down in late trading. London May-26 feed wheat edged 0.1% higher.
Rapeseed also made marginal headway, gaining 0.1% in Paris for February-26 delivery to hit two-month highs, encouraged by the recovery in fellow oilseed soybeans, and supported too by continued headway in meal markets, a factor which is supporting crush margins.
Chicago soymeal futures for December-25 added 2.1%, to take to 14% their recovery over the past two weeks. The revival is being spurred by ideas that Argentina has oversold on soybean exports, forcing its crushers to scale back output of meal, of which the country is the top shipper.
