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Soybean bulls breathed a sigh of relief after reports that Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer would meet with their Chinese counterparts around mid-month to discuss potential deals during the summit meeting between President Donald Trump and Chinese leader Xi Jinping.
They had been fretting that the joint U.S.-Israel attack on Iran, a China ally, could derail the summit, with possibly bad consequences for Beijing’s commitment to continue buying U.S. soybeans following last October’s Trump-Xi trade truce. China’s top diplomat had blasted U.S. military action against Iran as “unacceptable.”
The meeting is good news, but it may not be the sign of desperation on Beijing’s part some commentators are making it out to be.
China’s relationship with Iran has always been nuanced, wrote Ahmed Aboudouh, associate fellow at London’s Chatham House think tank, in a paper published just before hostilities broke out last weekend.
First, China has publicly opposed a nuclear-armed Iran, fearing it would destabilize the region and also perhaps open the door to nuclear weapons for China’s own rivals, such as Japan, South Korea and Australia.
China, he wrote, has been playing a “long game,” aimed at seeing Tehran grow its reliance on Beijing.
The Economist, meanwhile, argued that China’s leaders may be less troubled by developments in Iran than widely assumed. The magazine noted that Chinese leaders were alarmed by Iranians rising up in late December against their own government.
- “The spectacle of a popular movement toppling an autocratic regime is precisely the kind of thing that makes officials in Beijing anxious. An airstrike that kills a political leader is, from China’s perspective, a more manageable event. It is easier to voice outrage at warmongering Americans. It is also possible to imagine various outcomes in Iran that might work to China’s advantage,” the Economist wrote.
While China’s so-called teapot refiners are the biggest consumers of Iranian crude, the country has a diversified source of crude suppliers. It’s also made relatively few direct investments in Iran despite pledges to do so, the article said.
And then there’s the war itself. If the U.S. gets bogged down in the Middle East it would be an echo of the early 2000s when the Iraq war distracted the U.S. from China’s rising competitive threat, the magazine argued.
“All of this makes for an unsentimental China,” the Economist said. “It is not about to abandon Iran as a partner. But it may not much care whether the clerics remain in charge or whether some other constellation of leaders, perhaps drawn from the revolutionary guards, takes over.”
Farmer sentiment improves, but still downbeat: The Purdue University - CME Ag Economy Barometer saw a modest pickup in farmer sentiment in February, though respondents were still downbeat about the future.
The farmer sentiment index increased from 113 in January to 116 in February. Sentiment regarding current conditions rebounded by 11 points, while sentiment regarding future expectations continued to decline, falling 1 point to 114. That’s 45 points lower than last year’s February index, reaching its lowest level since September 2024.
Among the findings:
- The percentage of producers who expected bad times in February was 48%, double the share reported in February 2025.
- There was a large disparity in expectations between crop and livestock producers. Approximately 63% of respondents expected bad times for crop producers, while only 17% expected bad times for livestock producers.
- Around 50% of respondents indicated that they plan to expand their operations in the next 5 years, and 36% expect to bring another family member into the business.
- Finally, despite the prospects for upcoming payments under the Farmer Bridge Assistance Program, the percentage of producers who thought the U.S. was heading in the right direction has dropped from 75% in December to 59% in February.
“Overall, the February results suggest that while producers report improved current conditions, confidence in the longer-term outlook continues to weaken,” wrote Purdue’s Michael Langemeier and Joana Colussi. “Although many operations are planning to expand, persistent concerns about input costs, commodity prices, and the broader direction of the U.S. economy appear to be limiting optimism about the years ahead.”
Naval escort: Oil futures surged again Tuesday, with Brent crude briefly trading above $85 a barrel but paring gains to end near $81 – still a gain of around 5% on the day. The pullback came after President Donald Trump, in a social media post, said the Navy could begin escorting tankers through the Strait of Hormuz, which accounts for 20% of global energy supply.
“No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD,” Trump wrote. The president also said that he had ordered the U.S. Development Finance Corporation to provide reasonably priced political risk insurance and guarantees for all maritime trade, especially energy, through the Persian Gulf.
Gasoline and diesel prices are moving higher in response to the surge in oil.
- After rising 10.8 cents a gallon Monday, the national average price of diesel was up 8.1 cents a gallon Tuesday afternoon to $3.929 a gallon, a rise of almost 20 cents in two days, said Patrick DeHaan, head of petroleum analysis at GasBuddy, in an X post.
5-year plan, food security section: Meanwhile, China is expected to unveil its next five-year plan at a parliamentary meeting on Thursday, Reuters noted, setting Beijing’s agenda for the economy.
When it comes to food security, expect China to make an effort to help bridge the gap between its massive population and an agricultural sector that lacks the scale or technological sophistication of the U.S. or Brazilian ag sector, Even Pay, a director at research Group Trivium China told the news service.
Pay expects a focus on the future of genetically modified crops, which haven’t been adopted at scale due to high prices and resistance from both farmers and consumers. Analysts are also on the lookout for signals about plans to reduce China’s reliance on imported soybeans and other grains, the report said.
Got milk futures? CME Group on Tuesday said that its dairy futures and options products set a new open interest record of 403,113 contracts on Feb. 27. Also, dairy futures and options reached a new record monthly average daily volume of 11,234 contracts in February, the exchange operator said, surpassing the previous record of 9,514 contracts set in September 2025.
“Tightening nonfat dry milk and butter inventories along with strong demand for whey protein have led clients to turn to CME Group in record numbers to manage their risk,” said John Ricci, CME Group managing director and global head of agricultural products.
Other records achieved across dairy products included:
- Class IV Milk futures and options traded a record monthly ADV of 1,443 contracts.
- Cash-Settled Cheese futures and options reached a record OI of 90,378 on February 26 and monthly ADV of 2,985 contracts.
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