After months of negotiations and no 2025-26 marketing year purchases of soybeans until earlier this week, the United States and China on Oct. 30 agreed to a new trade framework that will forestall massive tariff increases set to begin in November.
The United States will lower its cumulative tariff rate on Chinese goods to 47% in exchange for various concessions from China, including better access to refined rare earth materials and “stopping the flow of fentanyl,” officials from both countries said during talks in South Korea.
Key to the US agricultural sector, “large amounts, tremendous amounts of the soybeans and other farm products are going to be purchased immediately,” US President Donald Trump told reporters. Both countries will also roll back or suspend punitive port fees imposed on ships earlier this year, which led to a 60% decline in container traffic at US ports this summer. US officials said the fees on Chinese ships would be suspended for at least one year.
“The Chinese side will make corresponding adjustments to its countermeasures against these US tariffs,” China’s commerce ministry said, noting specifics of the trade deal still were being worked out. “Both sides also agreed to extend certain tariff exclusion measures further.”
A day before the agreement was announced, COFCO, a Chinese state-owned entity, bought three cargoes of US soybeans, about 180,000 tonnes, for shipment in December or January 2026, in China’s first purchase of US soybeans this marketing year. In 2024, China purchased approximately $12.6 billion worth of US soybeans, accounting for more than half of all US soybean sales. The next closest buyers were the European Union at $2.5 billion and Mexico at $2.3 billion, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture.
The USDA’s weekly Export Sales reports have been suspended since the beginning of October because of the partial federal government shutdown, leaving markets short of a key data source.
US Secretary of Agriculture Brooke Rollins touted the sale on social media, writing: “Today’s purchase by China of multiple ships of American soybeans signals (the president’s) strong dealmaking and a positive step forward for our farmers.”
The same day the sale was announced, Illinois Governor J.B. Pritzker declared an agricultural trade crisis in his state, the nation’s top soybean producer and exporter, citing production losses of $100 to $200 per acre among soybean farmers. Peak US soybean export season runs typically from October through January, before giving way to South American supplies, which are harvested in the spring.
“Traders do not expect a significant resumption in demand for US cargoes after recent large South American purchases,” sources told Reuters on Oct. 29.
Oilseed analysts and traders projected that China still needs about 5 million tonnes of soybean shipments in December and January 2026, but strengthening prices of US soybeans this week have put them roughly on par with Brazilian beans, making the latter likely to win out, as Chinese crushers tend to prefer Brazilian beans for their higher protein content.
Analysts said China still could purchase US soybeans for its strategic reserves through next May, which could be worth $4 billion, less than one-third of what China bought in 2024.
Iowa Secretary of Agriculture Mike Naig sounded an upbeat note for the nation’s second largest soybean producing state.
“This is great news for Iowa farmers and our ag economy,” Naig said. “Expanded soybean purchases by China will make a meaningful impact at a time when many farmers are feeling the pain of a tough farm economy. It’s important that we continue to play offense on trade by opening and expanding new markets while also driving domestic use of Iowa products, especially homegrown biofuels.”
China is also a major buyer of US sorghum, accounting for about 90% of US sorghum exports in 2024. So far this year, US sorghum sales to China are down nearly 97%, according to government data.
Other trade deals
Earlier this week, in a flurry of announcements, US officials touted breakthroughs with Asian trade partners, including South Korea, Vietnam, Thailand, Malaysia and Cambodia, which either signed new deals or agreed to frameworks.
“These landmark deals demonstrate that America can maintain tariffs to shrink the goods trade deficit while opening new markets for American farmers, ranchers, workers and manufacturers,” said Ambassador Jamieson Greer of the Office of the US Trade Representative.
Among the agreements, officials said: Thailand will purchase $2.6 billion annually of US soybean meal, feed corn and dried distillers’ grains; coffee imports from Vietnam are now tariff-free; tariffs on ethanol exports to Malaysia and Cambodia were waived; and Malaysia secured tariff exemptions for commodities, including palm oil and cacao.
Agricultural industry groups welcomed the news.
“This is all very good news for the nation’s corn growers,” said Jed Bower, president of the National Corn Growers Association (NCGA). “Eliminating tariffs on ethanol exports to Malaysia and Cambodia will boost demand. We are encouraged to see that the framework for Thailand included agriculture purchases of corn and (dried distillers’ grains). The announced framework for Vietnam is also promising, as this is already a robust market for (dried distiller’s grains) and corn growers are well positioned to supply corn and ethanol as well.”
Caleb Ragland, president of the American Soybean Association (ASA) and a Kentucky soybean farmer, added: “We appreciate President Trump’s recognition of the promise markets in Southeast Asia hold for US soybean exports, and we applaud the work of the administration to increase market access in that region.”
This week’s trade developments also could give US wheat exports a boost. In 2024, 7 of the top 10 international destinations for US wheat were in Asia, including the Philippines ($728.3 million worth of exports), Japan ($532 million), South Korea ($478 million), China ($441 million), Taiwan ($316 million), Thailand ($198 million) and Indonesia ($198 million), according to the FAS.
Chicago Board of Trade soybean, soybean meal and corn futures all surged this week on the Asia trade developments, with soybean futures reaching their highest level in 15 months. On Oct. 30, the December soybean contract was up nearly 10% from the beginning of the month, while December soymeal was up more than 15%.