Background on Key Figures and Context
Soybean futures in Chicago reached their highest level in a month, driven by optimism ahead of upcoming trade talks between the United States and China. This surge comes after U.S. President Donald Trump expressed confidence that China would accept a trade deal and resume purchasing U.S. soybeans.
Soybean Futures Performance
The November Chicago Board of Trade (CBOT) soybean futures rose by 12.5 cents, reaching $10.32 per bushel – the highest since September 19. This increase was followed by gains in corn and wheat futures, although their abundant supply limited the upward momentum.
- November CBOT corn futures increased by 1 cent to $4.2350 per bushel.
- CBOT December wheat futures rose by 1.25 cents to $5.05 per bushel.
Trade Talks and Market Sentiment
Soybean prices surged before the scheduled meeting between Trump and Chinese President Xi Jinping in South Korea later this month. Trump stated on Sunday that he believed China wanted to buy U.S. soybeans “at least in the amount previously,” and that a grain agreement could be reached.
“The market just wants to believe that something positive might come out of this,” said Don Roose, president of U.S. Commodities. “Hedge funds have stopped trying to push the soybean futures market down.”
China’s Soybean Import Changes
In September, China did not import any soybeans from the United States for the first time since November 2018, with Chinese buyers turning to South American suppliers amid the U.S.-China trade war.
Key Questions and Answers
- What caused the rise in soybean futures? Optimism surrounding upcoming US-China trade talks led to the increase in soybean futures.
- Which other commodities followed the soybean price surge? Corn and wheat futures also experienced gains, though their abundant supply limited the extent of the increases.
- What did President Trump say about China’s intentions regarding soybean purchases? Trump expressed confidence that China would accept a trade deal and resume buying U.S. soybeans “at least in the amount previously.”
- Why did hedge funds stop pushing down soybean futures? According to Don Roose, president of U.S. Commodities, the market sentiment shifted, and hedge funds no longer attempted to suppress soybean futures prices.
- What changes occurred in China’s soybean imports from the U.S. in September? China did not import any soybeans from the United States in September, marking the first time since November 2018 that imports fell to zero. Chinese buyers instead sought supplies from South America during the U.S.-China trade dispute.
