Grain Futures Rise on Expectations of U.S.-China Trade Deal — Daily Grain Highlights

By Paulo Trevisani

--Soybeans for January delivery rise 0.9% to $10.95 1/4 a bushel on the Chicago Board of Trade on Tuesday, as markets hope for the return of Chinese buyers.

--Wheat for December delivery rose 0.6% to $5.29 a bushel.

--Corn for December delivery rose 0.8% to $4.32 a bushel.

HIGHLIGHTS

Fentanyl vs. Soybeans: A potential U.S.-China deal around the lethal fentanyl drug could help American soybean producers. WSJ reported the U.S. may roll back some tariffs on China if Beijing cracks down on sales of chemicals used to produce fentanyl. China has retaliatory tariffs on U.S. soybeans in response to the 20% fentanyl-related U.S. levies on Chinese goods. Lifting these tariffs would be important to rekindle Chinese purchases of U.S. soybeans. There is doubt, however, as to what extent China will buy U.S. crops, now that it has been importing more from Brazil and Argentina. Meanwhile, a rally in grain futures loses steam.

Deal Hopes: Wheat leads the grains rally in early trading, before losing some steam but still closing with gains. RCM's Doug Bergman wrote that wheat is overbought, "with prices pushing through technical resistance that will likely spark more fund short-covering." He expected buyers to step in on pull-backs due to high levels of short positions.

INSIGHT

Trust China?: Hopes of a U.S.-China trade deal buoyed grain futures, but there is some skepticism about the potential benefits. "The last thing American farmers need is a purchase promise that isn't kept," AgResource said in a note, as China has pledged to buy more U.S. soybeans in the past. AgResource believes Beijing "will not lock itself into a trade deal that excludes other suppliers." It added that China "is flooded with South American soybeans," limiting appetite for U.S. exports. AgResource said the market "is getting ahead of itself."

Maritime Ethanol: Shipping giant Maersk's recent announcement that it is testing a mix of Brazilian ethanol with methanol and marine diesel to reduce its fleet's carbon footprint may have implications for the global corn trade. "A 10% mixture in the fuel of the world's entire maritime segment would require approximately 50 billion liters of ethanol annually," Soybean and Corn Advisor's Michael Cordonnier wrote. Brazil's ethanol is mostly made from sugar cane, but if the Maersk experiment is successful, the country may need to use more corn for fuel. "Such an increase in corn ethanol production could limit Brazil's future corn exports," Cordonnier said.

AHEAD

Note: The government shutdown is impacting the timing of USDA reports and data releases.

-Phillips 66, which produces renewable fuel using soyoil along with other fuels, will report its third quarter earnings report at 7 a.m. ET Wednesday.

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

-Pilgrim's Pride Corp. will release its third quarter earnings report after the stock market closes on Wednesday.

Write to Paulo Trevisani at paulo.trevisani@wsj.com

(END) Dow Jones Newswires

October 28, 2025 14:54 ET (18:54 GMT)