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Fears that the U.S. blockade of the Strait of Hormuz would antagonize Beijing and potentially delay a mid-May meeting between President Donald Trump and Chinese leader Xi Jinping faded Wednesday, appearing to spark a rally for soybean futures.
Trump, in a Truth Social post, said China was “very happy” about U.S. efforts to open the Strait and had agreed not to send weapons to Iran. “President Xi will give me a big, fat hug when I get there in a few weeks,” he wrote.
July soybeans rose 10 1/2 cents to $11.83 ¼ Wednesday, after back-to-back losses. The market perked up toward the end of overnight trading, following Trump’s social-media post. The U.S. blockade is aimed at choking Iran of revenues from oil sales, including to China.
Tensions had been seen on the rise after news reports over the weekend said China was preparing to send weapons to Iran, prompting Trump to threaten to hit Beijing with 50% tariffs. On Monday, Treasury Secretary Scott Bessent charged that China had been hurting the global economy by hoarding energy and sidestepped a question about whether the Hormuz crisis would threaten the Trump-Xi meeting, which traders are looking to for affirmation China will follow through on what the White House has said is a pledge to buy 25 million metric tons of soybeans a year for the next three years.
Trump told Fox Business in an interview aired Wednesday morning that he and Xi had traded letters over the weapons issue. Trump said he “wrote him a letter asking him not to do that, and he wrote me a letter saying that essentially he’s not doing that.”
- Be aware: Meanwhile, the Financial Times on Wednesday morning reported that Iran secretly acquired a Chinese spy satellite that provided a capability to target U.S. military bases across the Middle East. Bloomberg noted that Xi on Tuesday broke a nearly seven-week silence on the Iran war, saying the world order is “crumbling into disarray,” while pledging to play a “constructive role” in the Middle East, while the nation’s foreign ministry called the naval blockade “dangerous and irresponsible.
Suspicious timing: The Commodity Futures Trading Commission is investigating a series of suspiciously well-timed oil trades made just before Trump’s recent policy pivots on Iran, Bloomberg reported on Wednesday.
On March 23, oil and stocks futures worth billions of dollars were traded 15 minutes before Trump said previously threatened strikes on Iranian energy infrastructure would be delayed, the report noted. The president’s comments in a Truth Social post sent crude prices plummeting and equities soaring. A similar pattern was seen ahead of Trump’s April 7 announcement of a two-week ceasefire with Iran. Futures activity increased in the hours before the news, which caused both oil and gas prices to plunge. Bloomberg said the White House circulated an internal memo last month cautioning staff against trading on sensitive information in financial markets and rapidly expanding event-based betting platforms.
Pet food industry’s biofuel backlash: The pet food industry is warning of a worsening feedstock crunch as the surge in biofuel production continues to swallow up supplies of animal fats and vegetable oils,Agri-Pulse reported.
The problem for the pet food industry is that fuel producers have a financial incentive to make their products from animal fats, such as tallow, the report said. That’s left the two industries vying for the same feedstocks, a rivalry that’s intensified since around 2023.
Scramble for urea: Indian Potash Ltd. received offers to supply urea at around $1,000 per metric ton in its latest tender, Reuters reported, nearly double the price achieved two months ago, after supplies were disrupted by the Iran war.
Indian purchases at these levels is expected to increase global urea prices in spot markets and force smaller buyers in Asia and Africa to pay more for the crop nutrient needed to sustain crop productivity, the report noted.
Fire Powell? President Trump threatened to fire Jerome Powell if he doesn’t step down when his term as chair of the Federal Reserve expires in May, Barron’s reported on Wednesday. Under Fed regulations, the chair can serve “pro tempore” if a successor hasn’t been installed, the report noted, observing that Powell served in that capacity for several months in early 2022 while awaiting confirmation to his second term. Powell has also said he intends to stay on as governor until a Department of Justice investigation is resolved.
Fading premium: The International Monetary Fund warned the U.S. on Wednesday that Treasuries are losing their “premium” status as global concerns mount over the nation’s debt management, Bloomberg reported. The US has been selling large volumes of debt because its budget deficit has averaged roughly 6% of gross domestic product over the past three years — a historically large shortfall outside of wartime or recession eras, the report noted, with the gap is expected to stay around those levels throughout the coming decade.
Lawsuit shield: Iowa legislators have passed a bill that would shield farmers and ethanol plants from lawsuits over the climate impacts of their greenhouse gas emissions, according to Inside Climate News. The legislation, which now awaits Governor Kim Reynolds’ signature, aims to prevent what sponsors call “frivolous” climate litigation. While the threat of such lawsuits against individual farmers has been minimal, legal experts suggest ethanol producers—who have faced recent enforcement actions for emissions violations—stand to benefit most from the new liability protections.
Protein push: Chobani is reshaping its dairy empire as it looks to lead a market increasingly driven by high-protein wellness trends,Food Dive reported. The company is signaling a shift toward more aggressive mergers and acquisitions to expand its reach across the dairy and shelf-stable categories. Following its recent acquisition of La Colombe and Daily Harvest, leadership indicated the company intends to pivot further into protein-enhanced smoothies and portable nutrition to cement its status as a market leader in the natural protein space.
The report noted that Chobani has benefited from a resurgence in dairy demand due to growing consumer interest in protein. That’s also been aided by new U.S. dietary guidelines recommend full-fat dairy and put dairy products at the top of the new food pyramid.