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Livestock futures put together a winning week, while soybeans stumbled and corn and wheat also lost ground. Here’s a rundown of some of this week’s major market-moving events:
The mysterious soybean ‘season’
In an onstage interview Wednesday, Andrew Ross Sorkin of the New York Times and CNBC pressed Treasury Secretary Scott Bessent on whether China would meet its alleged commitment to buy 12 million metric tons of U.S. soybeans before year-end. Bessent corrected Sorkin, telling him that the commitment was for China to make the purchases “by the end of the season, so I think that will be Feb. 28.” China, he said, was “in a perfect cadence” to meet that goal.
Market participants weren’t overly impressed, in part because no one in the trade seems to have any idea what Bessent means by “the season.” The marketing year runs from Sept. 1 to Aug. 31. But the bigger issue was that Bessent appeared to be moving the goalposts. The White House, after all, said in a Nov. 1 fact sheet that China “will purchase at least 12 million metric tons (MMT) of U.S. soybeans during the last two months of 2025.” The U.S. has also said China agreed to purchase at least 25 MMT of U.S. soybeans in calendar years 2026, 2027, and 2028. Beijing has yet to affirm the details of the agreement, which followed President Donald Trump’s late October meeting with Chinese leader Xi Jinping in South Korea.
China has accelerated purchases but hitting 12 million MT by year-end was already seen as quite a stretch. That makes it hard to hang this week’s entire pullback on the shifting soybean season, but it is clear the market remains anxious about the U.S.-China deal and exactly what Beijing has committed to do. Indeed, Friday’s soybean selloff accelerated after reports underlined uncertainty over exactly what China has formally agreed to when it comes to soybean purchases. Read the latest Pro Farmer weekly newsletter.
Geopolitics vs. supply
Wheat futures, as well as corn, got a lift early this week as fears that fighting between Russia and Ukraine could create transportation disruptions in the Black Sea region. Ukraine’s attacks on Russia’s “shadow fleet” prompted saber-rattling by Russian President Vladimir Putin, who on Tuesday said “the most radical solution” would be to “cut Ukraine off from the sea.”
That prompted short covering that helped lift Chicago SRW futures off of a five-week low, while corn also gained ground. But it wasn’t enough to provide a lasting lift, with the wheat complex finishing mostly lower for the week on Friday.
Ample global supplies continue to hang over the wheat market, with Canada this week affirming its estimate of a record crop while farmers in the southern hemisphere continue to harvest burgeoning crops of their own.
Another E15 turnabout
The American Petroleum Institute is back in the fold pushing for year-round sales of fuels with higher ethanol blends – along with an overhaul of how exemptions to those blending rules are granted.
In a letter to the White House delivered on Thursday, the API joined with groups representing the biofuels industry and fuel retailers to call for year-round sales of fuels containing 15% ethanol, or E15. “E15 continues to play an expanding role in the fuel marketplace, but unpredictable short-term waivers, seasonal and geographic restrictions, and regionally unique summer gasoline specifications in the Midwest have created a shifting regulatory environment that complicates planning and investment. Legislation allowing the year-round, nationwide sale of E15 would improve fungibility and substantially reduce many of the complexities that arise for our industries as we operate in a national marketplace,” the groups wrote.
API, the largest oil and gas trade group, had previously backed year-round E15 but in October said it opposed legislation that would have cleared the way, marking a reversal, according to Bloomberg.
Following that turnabout, news reports had said API was pushing the White House for a major revamp of the way regulators determine exemptions to a program that requires refiners to blend biofuels into gasoline. In Thursday’s letter, the groups said Congress should take legislative action to reform the Small Refinery Exemption program.
“The current SRE structure has encouraged a system of winners and losers that distorts the marketplace, creates instability, and ultimately, hurts consumers. A more consistent and narrowly applied SRE structure would create a far more predictable regulatory environment,” they wrote.