First Thing Today | Soybeans rally after Trump urges China to buy U.S. beans

Traders await USDA supply and demand report out Tuesday

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Pro Farmer First Thing Today
(Lindsey Pound)

Good morning!

Soybean rally leads grains mostly higher overnight… As of 6:00 a.m. CDT, November soybeans were up 21 3/4 cents and hit a two-week high as President Trump has urged China to buy more U.S. soybeans. December corn futures were up 2 1/4 cents. December winter wheat futures were a penny lower to a penny higher. The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are near steady and trading around $64.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.26 percent.

Trump tells China to buy more U.S. soybeans… President Trump said in a social media post today he hopes China will dramatically increase its purchases of U.S. soybeans. “China is worried about its shortage of soybeans,” Trump wrote on the Truth Social platform. “I hope China will quickly quadruple its soybean orders. This is also a way of substantially reducing China’s trade deficit with the USA.” Trump’s comments rallied soybean futures overnight and spurred fresh optimism that a trade deal between China and the U.S. could soon be completed. China faces an Aug. 12 deadline before its tariff truce with the U.S. expires. However, the Trump administration has suggested that deadline is likely to be extended.

China stocks rally on hopes for U.S.-China trade deal…The Shanghai Composite rose 0.34% Monday, while the Shenzhen Component climbed 1.46%, extending last week’s gains as investors awaited news on whether the U.S.-China tariff truce will be extended ahead of the Tuesday deadline. Reports said China is seeking U.S. concessions on export controls for artificial intelligence chips as part of a trade deal, potentially ahead of a summit between Presidents Donald Trump and Xi Jinping.

Grain traders await Tuesday’s USDA supply, demand report… Tuesday comes arguably the data point of the month for the grain markets: USDA’s monthly supply and demand report. Huge and even record yields could be forecast for the U.S. corn and soybean crops. A Dow Jones Newswires survey of grain analysts shows they expect U.S. corn production this year at 15.991 billion bushels, with an average yield of 184.3 bushels an acre. The record for U.S. corn production, according to USDA, is the 15.186 billion- bushel crop grown in 2024, with a record average yield of 183.6 bushels per acre. The Dow Jones Newswires survey expects U.S. soybean production in 2025 at 4.371 billion bushels and an average yield of 53.0 bushels an acre. U.S. soybean production in 2024 totaled 4.37 billion bushels, which was also a record. The average yield per acre was 50.7 bushels.

National corn yields often drop when planted acreage is high...Will 2025 be an exception? Conventional wisdom holds that when U.S. corn acreage is large, national yields will be below trendline because farmers opted to plant on less-productive land.

With corn acreage at 95.2 million acres, 5% higher than last year, fringe acreage likely contributed to that higher number. However, given that Chicago Board of Trade December corn futures prices are down 7% since May, when farmers start planting corn, market participants are factoring in higher-than-trendline yields because of near-perfect growing conditions in the Corn Belt, says Sean Lusk, vice president at Walsh Trading.

“In the big producing states, they look like they’ll have bumper yields so far. You’re pricing that in now,” Lusk says, citing USDA’s National Agricultural Statistics Service’s Aug. 4 weekly crop condition report that puts 73% of the national corn crop in good-to-excellent condition.

On Tuesday, USDA will release its August crop report, the first survey-based view of the developing corn crop, and market participants are expecting a bin-buster.

Some private crop estimates, such as those from StoneX which is forecasting national corn yields at 188.1 bushels per acre, are well above USDA’s current 181 bpa trendline.
There is still plenty of growing season left and changes in weather could upend current yield estimates, but 2025 maybe the year the idea of reduced national corn yields on big acreage bucks the conventional wisdom. Click here to read more.

Still no crop-threatening weather for U.S. corn, soybeans… World Weather Inc. said late Sunday U.S. rain this week will be limited in the lower and eastern Midwest and from Nebraska into parts of Iowa. “These areas will be closely monitored for additional drying, although most computer forecast models bring timely rain around to prevent dryness from becoming a serious threat into the third week of this month.” Drying will continue in the far western U.S. and in portions of Texas as well as the northeastern states. Most other areas will get timely rain to support normal crop development and field work.“ U.S. crop areas east of the Rocky Mountains will experience very little excessive heat in the next 10 days. Midwest temperatures will be seasonable during much of the two-week forecast,” said World Weather.

China increasing its soybean oil exports… China is increasing its exports of soybean oil, with about 127,000 tons exported in the first half of the year, according to customs data. The country is also testing deliveries of soybean meal from Argentina, a substitute for importing beans and crushing them into animal feed at home, with Bunge Global SA recently selling at least two shipments to Chinese buyers, according to a report from Bloomberg. ”These shifts in trade flows may allow China to reduce its need for American soybeans, with Arlan Suderman, chief commodities economist at StoneX Financial Inc, saying that China’s recent purchases of Argentine soymeal send a statement to the U.S. that it’s willing to sacrifice its crush capacity to avoid buying U.S. soybeans,” said Bloomberg.

Report: U.S. trade deal talks will be completed by October… The U.S. expects to largely complete trade negotiations with countries that have yet to secure a deal by the end of October, Nikkei Asia reported, citing an interview with U.S. Treasury Secretary Scott Bessent. The comments, made to Nikkei on Thursday and reported by Bloomberg, come after President Trump’s new tariffs took effect. Some key trading partners, including Canada, Mexico and Switzerland, are still seeking to secure better terms with the U.S.

Major New World Screwworm announcement coming… USDA Secretary Brooke Rollins said Saturday she will have a major announcement this week in the battle against New World Screwworm, the flesh-eating pest that has been moving up from Central America through Mexico, forcing the periodic suspension of U.S. livestock imports.

Palm oil futures prices near steady… Malaysian palm oil futures were little changed Monday, hovering around MYR 4,250 per MT after modest gains Friday. Malaysian Palm Oil Board (MPOB) monthly figures showed inventories in July rose 4.02% month-over-month to 2.11 million MT, the highest in nearly two years, while crude palm oil output jumped 7.09% to 1.81 million tons, the most since September 2024. Meantime, exports rebounded 3.82% to 1.31 million tons in July, after June’s sharp drop.

Heavy profit-taking pressure hit cattle futures markets hard Friday... Cattle futures bulls need to step up today, following strong losses Friday, as good follow-through selling pressure would begin to suggest major market tops are finally in place for the record-setting bull runs in live and feeder cattle futures markets. Cash cattle trading activity picked up Friday, with USDA reporting steers fetching an average price of $239.26 and heifers averaging $240.27. The week prior’s average cash cattle trading price was at a record high of $243.17. Friday’s strong selling pressure has the cattle futures market bulls spooked, especially as peak outdoor grilling season will continue to wind down into late summer. Cattle slaughter levels also typically start to increase in August. Bulls are hoping wholesale beef values will remain elevated as retailers build inventories for the Labor Day holiday features.

Lean hog futures traders will be looking to the cattle futures markets for price direction… The lean hog futures market paused Friday, with buying interest limited by the big sell offs in live and feeder cattle futures markets. This week’s price action in hog futures will likely be impacted at least to some degree by price action in cattle futures. The latest CME lean hog index is up 50 cents to $110.10 as of Aug. 6, reversing from recent weakness. Monday’s projected hog index price (for Aug. 7) is up 15 cents at $110.25. The national direct five-day rolling average cash hog quote today is $111.54. Hog slaughter levels start to pick up in late summer, as the same outdoor grilling season tapers off. It may be tough for the lean hog futures, cash hogs and fresh pork markets to make much upside price headway if such conditions prevail in the coming weeks.

Today’s reports—Monday

--Weekly USDA export inspections report. 10:00 a.m.
--Weekly USDA crop progress report. 3:00 p.m.