Grain markets surge on White House announcement of Chinese purchases
• China purchase announcement leads grain markets higher
• Soybeans expected to be main beneficiary but other ag products included
• Rains benefit Midwest, too late for US plains
• Iran peace talks looking increasingly fragile
Grains and oilseeds started the week on a bullish note, led by CBOT following yesterday’s announcement from the White House of China’s purchase commitments.
Wheat, corn and soybeans all made gains of over 20c$/bu with soybeans rallying 40c$, following the White House’s statement after President Trump’s visit to China, which highlighted:
- China will purchase at least $17 billion per year of U.S. agricultural products in 2026 (prorated), 2027, and 2028, in addition to the soybean purchase commitments that it made in October 2025.
- China restored market access for U.S. beef by renewing expired listings of more than 400 U.S. beef facilities and adding new listings. China will work with U.S. regulators to lift all suspensions of U.S. beef facilities.
- China resumed imports of poultry from U.S. states determined by the USDA to be free of highly pathogenic avian influenza.
If fulfilled, the significance of the announcement for US farmers would be profound, however market remain cautions following similar announcement in Trump’s first term, which never fully materialised, although promised purchases of 12Mt of US soybeans in 2025, were eventually fulfilled.
As with 2020, the market will be watching closely for evidence of actual demand and shipments before full reacting to the significant statement.
European wheat markets were also higher on the news of potential demand increases. Euronext wheat was trading at €212.75 (+€3/t), with rapeseed and corn also gaining.
Oil prices rose on Monday, as hopes of a positive outcome to US/Iran peace talks look increasingly unlikely, talks have returned to renewed military action.
Maritime data from the JMIC shows the flow of vessels through the Strait of Hormuz are still a fraction of normal levels at around 10 vessels per day, vs 138 average pre war. Threats are still cited as ’Critical’.
US crop progress reports this evening are expected to show wheat crops in a historically poor state following the prolonged dryness and advanced crop growth state. Wheat prices would need to rise further should China’s purchase commitments also include wheat, although the details remain thin at this stage.
Beneficial rains have fallen across Europe and the Black Sea over recent days. Although dryness is expected to return in the coming weeks, crops are widely seen in good condition at this stage.
