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President Donald Trump on Friday said he expects to complete a number of deals with Chinese President Xi Jinping at their White House summit next week. The event promises to be the main event for agricultural commodity markets, with producers looking for concrete commitments to Chinese purchases of U.S. commodities and the relaxation of tariffs.
“We’re going to have a lot of different deals,” Trump told reporters in the Oval Office, without elaborating, Bloomberg reported. “We’re not just doing it for our health.”
As previously reported, the American Soybean Association this week sent Trump a letter that expressed support for a U.S.-China Board of Trade that includes soybeans as a non-sensitive good, called for eliminating China’s 10% retaliatory duty on U.S. soybeans, and asked the administration to ensure any future implementation of Section 301 port fees on Chinese ships does not disrupt or diminish U.S. export sales.
The Trump administration has said China committed last fall to buying 25 million metric ton (MMT) of soybeans a year in 2026, 2027 and 2028 and has also said that China has committed to purchases of $17 billion a year in non-soybean ag commodities. China has never affirmed commitments to purchase specific amounts of ag commodities but has been an aggressive soybean buyer over the past several weeks, booking more than half of the purported 25 MMT soybean commitment. Bloomberg reported Friday that representatives from state-owned food trading firm Cofco are likely to join Xi’s delegation. U.S. Trade Representative Jamieson Greer said earlier this month that both countries would make “some announcements on agriculture and non-tariff barriers” during the summit, without providing specifics.
The meeting comes ahead of the expiration of a one-year trade truce Trump and Xi agreed to in South Korea last fall. Next week’s visit comes after Trump attended a May summit in Beijing that attempted to further ease tensions over trade, as well as the war in Iran and Taiwan. Tensions have also built over artificial intelligence.
Best case, worst case? The South China Morning Post laid out potential best- and worst-case scenarios for the summit.
- Best case: China might agree to buy key U.S. goods, and both sides agree to formally lower tariffs. That includes progress on cutting reciprocal tariffs on around $30 billion in trade on each side, which the two sides agreed to do in May. Steadying the supply chain for critical minerals, where China holds key reserves needed by the U.S., may also see progress next week, the report said.
- Worst case: Trump could move toward implementing a 7.5% “overcapacity” tariff on China. Tech ties could also come under pressure amid what analysts have termed a growing technology schism that now includes AI policy.
Weekly market recap: Soybean meal futures rallied to a series of 2 ½-year highs this week, before setting back on Friday, as domestic processors and end-users ran short on supply at the same time wet weather in the western Corn Belt delayed early harvest efforts. Meal strength buoyed soybean futures, while soybean oil, corn and wheat futures took cues from volatile crude oil prices, with WTI pushing back above the $100-a-barrel threshold. Corn traded sideways, with upside limited by early harvest pressure. A stronger U.S. dollar after a Fed rate hike and hawkish messaging also put pressure on grains. Cattle futures saw heavy selling late in the week amid lackluster cash trade ahead of Friday’s Cattle on Feed report. Lean hog futures slumped to a series of 15-month lows as the cash market weakened.
- November soybeans fell 16 ¼ cents to end at $13.03 ½, trimming the contract’s weekly gain to 7 cents.
- December soybean meal fell $12.70 to $358.60, leaving it with a weekly gain of $5.80.
- December soybean oil fell 93 points to 68.22 cents, down 146 points on the week.
- December corn fell 3 cents to finish at $5.27 ½, a three-week low and down 2 ¾ cents for the week.
- December soft red winter wheat lost 12 ¾ cents to $7.14 ¼, for a weekly fall of 11 cents.
- December cotton dropped 102 points to 81.15 cents, setting a six-week low and losing 491 points on the week.
- October live cattle rose 27.5 cents to close at $215.925, trimming its weekly loss to $3.75. November feeders shed 65 cents to $318, losing $10.175 for the week.
- October lean-hog futures lost 80 cents to $78.10, hitting another 15-month low and losing $3.425 for the week.
Record low August placements: USDA’s monthly Cattle on Feed Report released after Friday’s close showed a 1% rise from a year ago in the number of cattle on feed, while placements during August slumped 9% to the lowest reading for the month on record going back to 1996. August marketings were down 3% from a year ago. Read: Cattle on Feed inventory up just slightly from year-ago levels
Plains drought relief: World Weather Inc. said Friday that some short-term relief is possible in coming days for the U.S. southern Plains, were nearly two months of excessive heat and drier-biased conditions have caused significant crop and livestock stress. A frontal system is due to bring scattered showers and thunderstorms as cooler temperatures enter the region next week. Despite relief, the driest areas in the eastern Texas Panhandle and west-central Oklahoma are expected to remain drier biased, the forecaster said, while noting that NOAA’s 90-day seasonal precipitation outlook, released Thursday, suggests the potential for wetter than normal conditions October through December. World Weather said the forecast is based largely on past strong El Nino events and that it believes there is merit to the outlook.
- “If the long-range forecast verifies, it would bring greater relief to drought and pasture conditions, as well as improve support for the planting and establishment of winter crops,” World Weather said.
No diesel relief in sight: The average U.S. diesel price hit a record this week, $6.29 per gallon, up 68% from $3.74 a year ago, according to Energy Information Administration data, putting a squeeze on farmers as harvest gets under way across the Midwest. Analysts see little scope for near-term relief from tight supplies as Russia and Ukraine continue to trade strikes on refineries and Middle East shipments remain constrained. U.S. refiners are running full tilt to fill global gaps, noted Christopher Louney, analyst at RBC Capital Markets. “Efforts to delay maintenance remain one of the only areas of torque at the industry’s disposal,” he said in a note. “Furthermore, demand is less elastic for diesel, with much trucking and agricultural demand, than gasoline, for which drivers may taper driving at eye- watering prices.”
Rollins demands dairy checkoff halt ESG initiatives: USDA Secretary Brooke Rollins on Thursday told the chair of the National Dairy Board, which runs the dairy checkoff program, to halt several environmental initiatives because they aren’t aligned with Trump administration policy, Agri-Pulse reported. “Effective immediately, all projects funded by the dairy checkoff program must focus on long-term value creation for future generations and not activities advancing environmental, social and governance (ESG) frameworks, net-zero, or climate neutrality initiatives,” Rollins wrote in a letter to National Dairy Board Chair Lolly Lesher, the report said. Rollins specifically cited the checkoff’s work on Scope 3 greenhouse gas emission accounting, the U.S. Dairy Materiality Assessment, the U.S. Dairy Net Zero Initiative, Pathways to Dairy Net Zero, the Greener Cattle Initiative, the Sustainability Alliance, the U.S. Dairy Stewardship Commitment, Farmers Assuring Responsible Management (FARM) Environmental Stewardship, and 2050 environmental stewardship goals, but said other initiatives “may also be misaligned with departmental policy,” according to the report. Dairy Management Inc., a nonprofit that manages the dairy checkoff program, said the organization “will work closely with USDA to review our projects and to take necessary steps to modify or terminate contracts and activities as needed while maintaining our commitment to our authorized promotion, research, and consumer information functions.”
Illinois farmer named Berkshire Hathaway chairman: Billionaire investor Warren Buffett on Friday announced his decision to step down as chairman of Berkshire Hathaway, with the conglomerate naming his son, Howard Buffett, to the role effective immediately. The move is part of a longstanding succession plan but marks the end of an era that saw Berkshire helmed by the elder Buffett, 96, regarded by many as the world’s most successful investor. Warren Buffett had given up the role of CEO at the end of last year, with longtime Berkshire hand Greg Abel taking the helm. Abel will remain in charge of the day to day running of the company and its investment decisions.
Howard Buffett, 71, has lived in Decatur, Ill., for nearly 25 years and runs a 1,500-acre farm in the area, which was paid for with a gift from his father, noted Andew Bary of Barron’s, who has closely chronicled Berkshire and Warren Buffett. The son also heads the Howard G. Buffett Foundation, which receives an annual donation from his father.
Bary writes: Howard Buffett, like his father, grew up in Omaha, Neb., where Berkshire’s headquarters still are today. As a young man, he struggled for direction. He didn’t finish college. Eventually, though, he found farming and went at it with fervor in Illinois. Buffett’s calling, though, is philanthropy, and he has embraced it with a passion. A short chapter in his life that shows his commitment to community: About a decade ago, he served a year as a sheriff in Macon County, Ill.
Is rising oil always bullish for ag commodities? Rising crude-oil futures are typically seen as a positive for agricultural commodities and the broader raw commodity sector, and data backs it up. But the relationship can break down when oil prices hit extremes. Check out this week’s Pro Farmer newsletter for a deep dive by Economist Spencer Langford into what rising crude oil prices and the historical record has to say.