Porto Alegre, November 5th, 2025 – In another round of negotiations, some product segments reached a trade agreement, including soybeans. Although corn is not directly part of this process, since China has not purchased significant volumes of US corn for more than five years, the decision regarding soybeans could have significant indirect consequences. China’s absence from purchases in the United States would impact a strong reduction in planted area in the 2026 crop, with a consequent increase in corn acreage. With the agreement, if China fulfills the agreed volumes, markets should resume some normality in terms of soybean trade flow, prices, and premiums, also creating a situation of normality for corn.
October was a tense month in the context of commercial tensions between the United States and China. Several decisions did not result in tariffs but rather in trade limitations, such as those on Iranian oil and gas, sanctions on Russia, restrictions on the shipbuilding industry, and, finally, on rare earth minerals. In the latter case, the escalation of trade aggressions led the United States to announce the imposition of an additional 100% tariff on products from China if the Asian country maintained its restrictions on the export of these minerals, which are essential for the technology sector.
In addition to all this, China ended October with an unprecedented six-month period without shipping any volume of US origin. Naturally, the situation was aligning itself for a situation similar to that executed by China with corn, that is, today it no longer depends on corn from that origin. However, in the soybean market, China could not be completely absent from purchases in the United States, at least until February 2026, without causing strong impacts on premiums in Brazil, as was already occurring. So, at some point, China would have to buy soybeans in the United States or keep paying very high prices because of the tight supply from Brazil until then.
These situations combined to generate a new round of negotiations between the two countries, with an apparent solution for some segments of trade. The United States agreed to reduce the weight of general tariffs on China by 10%, from 57% to 47%. In exchange, China would not restrict the sale of rare earth minerals. Amid the negotiations, there were still items such as soybeans, essential for the US agribusiness and the domestic environment in the Midwest.
The trade agreement involving the soybean complex defines the purchase of 12 mln tons until January, 15 mln for the 2025/2026 business year, and 25 mln tons annually from this business year onward. China had already established a similar agreement in 2018 and did not fully comply with it in the short term, due to problems with the US crop. However, on average, China had been buying over 30 mln tons of US origin annually. Therefore, the agreement does not raise concerns or interfere with the commercial environment of other exporters, such as Brazil.
What is still unclear is when China will announce the effective reduction of tariffs on U.S. soybeans, currently at 20%. Corn was not included in this round of negotiations, mainly because China has not purchased corn from this origin for five years, and there was no pressure from the United States in this regard. However, the continued weakness in the soybean trade could have a strong impact on the decisions of U.S. producers regarding the 2026 planting. In 2019, after the first wave of the trade war, the reduction in soybean area was 11 mln acres. It would not be unusual to expect a similar decision for the 2026 crop. An excessive cut in soybeans could lead to an excessive corn area and significantly distort the global environment among exporters.
Now, markets are returning to find a rebalancing, some fears are mitigated, and the fundamental environment can reassess supply and demand and less distorted impacts from the trade war. Have soybean and soymeal prices risen? This is a normal movement given the resumption of purchases by China, since China made a “mistake” in being absent from the US market for so long and now ends up paying more for soybeans. On the other hand, China manages to rebalance premiums in Brazil and focus on the 2026 crop within its purchasing flow.
Corn attempted a more aggressive upward movement. As we pointed out, there is no direct relationship between the trade agreement and corn, but the probable impact on the planted area is what drives prices higher. With the market observing that the 12 to 15 mln tons of soybeans purchased by China will not seriously affect the supply and demand balance, soybeans are maintaining their price mainly due to short-term buying anxiety. However, this should not be enough to compromise competition with corn for planting in 2026. Therefore, after attempting a rally, corn has settled down again, and at this moment, the price of USD 4.30–4.40 per bushel remains strong given the size of the US supply and demand balance. This is positive for other exporters, such as Brazil, Argentina, and Ukraine, which can make sales at better prices.
Another important event last week was the Argentine government’s victory in the legislative elections. This result stabilized the exchange rate and expectations and consolidated important changes in South America. For local producers, the expectation of price increases due to a currency devaluation seems to have lost momentum, and with the arrival of a record wheat crop, it is likely that soybean and corn sales will accelerate toward the end of this year. For now, export registrations have reached only 25 mln tons of corn in the current business year. There is still time until March to reach the expected 34–36 mln tons in exports. Slight gains on the CBOT may help generate greater selling interest.
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