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Chinese President Xi Jinping’s visit to the U.S. set for Sept. 24 is circled on the calendar and China has maintained steady purchases of U.S. soybeans in the run-up to the summit meeting with President Donald Trump. But a Barron’s report on Wednesday highlighted potential sources of friction that are keeping analysts awake at night as they watch whether the leaders will extend a trade truce reached last fall that is set to expire on Nov. 10.
Those potential speed bumps include moves by federal security agencies to cite Chinese firms like DeepSeek and Alibaba over AI operations, while Washington considers closing remote-access loopholes for Chinese AI firms using overseas data centers, the report said.
Meanwhile, China continues to restrict rare-earth exports to the U.S. materials companies while Washington is preparing tariffs of at least 7.5% targeting Chinese manufacturing overcapacity. The report noted, however, that Beijing is expected to respond with only “very measured” retaliation as long as the tariffs remain under 7.5%. A more aggressive push by the U.S. to persuade Beijing to curtail support for Iran could also create increased friction, the report said, but noted skepticism among analysts that the U.S. would target China directly.
ASA welcomes 45Z guidance: The American Soybean Association (ASA) welcomed new federal guidance from the U.S. Department of Energy (DOE) and Internal Revenue Service (IRS) providing clarity on the 45Z Clean Fuel Production Credit. However, the group emphasized that more work is needed on a flexible “book-and-claim” accounting system — a tracking method that lets producers claim carbon credits based on sustainable farming practices without needing to physically segregate low-carbon crops throughout the supply chain.
“These actions provide greater economic certainty for the biofuels industry, which is a critical source of domestic demand for U.S. soybeans,” said Dave Walton, ASA vice president and Iowa soybean farmer, in a statement. ASA said it would continue advocating for a flexible book-and-claim system.
Market recap: A lack of fresh bullish catalysts, position-squaring ahead of Friday’s USDA reports and jitters over U.S.-Canada trade relations appeared to put some pressure on grain futures Wednesday.
- December corn fell 5 ¾ cents to end at $5.27 ¾.
- November soybeans dropped 6 ¾ cents to close at $13.09 ½.
- December soft red winter wheat declined 18 ¼ cents to $7.28 ¾, hitting a two-week low.
- December cotton rose 96 points to end at 87.28 cents.
- October live cattle fell $1.175 to finish at $215.85 after hitting a two-week high. November feeders rose 90 cents to $321.35, hitting a three-week high.
- October lean hog futures fell $1.175 to $83.075.
Oil ends above $100 a barrel: Brent crude on Wednesday rose 3.4% to close at $101.21 a barrel, its highest close since May 22. Diesel prices continue to lead the surge for fuel prices, with the average national U.S. price closing in on $6 a gallon as it continues to press into record territory just as harvest season gets under way. Surging prices for oil and, particularly, diesel are serving to stoke inflation fears.
More U.S. corn to Europe?: A Politico report notes that this summer’s European drought and the virtual shutdown of Ukraine’s cheapest export routes is seen creating an opening for U.S. corn. Alexander Döring, secretary general of FEFAC, which represents Europe’s animal-feed industry, told Politico that buyers are looking mainly to North and South America to cover the expected jump in imports, saying his group sees little scope for Ukraine to supply much of the extra corn Europe needs.The EU expects to import around 25 million metric tons of corn between July this year and next June, up from 19.3 million over the previous 12 months, after domestic production fell by roughly 10 million tons, according to Louise Bogey, a European Commission spokesperson for agriculture. Ukraine typically supplies around half of the bloc’s imported corn, she added.
Bessent bond move backfires: The Treasury Department on Wednesday announced it would buy back $6 billion worth of 10- to 20-year government bonds, aiming to boost prices and drive down yields. Instead, Treasury yields jumped sharply after the announcement, with the 10-year rate trading as high as 4.85%, the highest since November 2023, while the 30-year bond yield rose as high as 5.3%. Yields rise as Treasury prices fall. Treasury last month had said it would at least double buybacks of longer term bonds from a maximum of $2 billion per operation. Treasury Secretary Scott Bessent and officials have described lowering bond yields as a priority.
“Some investors said the Treasury Department is now in a difficult position because expectations for the size of repurchases are high, yet it could be difficult to truly impress the market without relaxing guidelines that it will only buy bonds at prevailing market prices,” the Wall Street Journal wrote.
Record Argentine corn exports ahead: Argentina’s corn exports are set to hit a record 10 million metric tons in August and September, Reuters reported, the result of a bumper harvest and strong international demand tied in part to Europe’s crop woes and Ukraine’s export bottlenecks. “Argentine corn right now is very competitive in price and in volume,” Gustavo Idigoras, head of the CIARA-CEC grains exporters and crushers chamber, told Reuters. Normal export volumes for August-September typically reach about 3 million tons, he said.
Idigoras said demand from North African countries — typically buyers of Ukrainian grain — has been the main driver.
USDA’s Rollins not planning run for office – ‘for now’: Asked during a Bloomberg Television interview whether she would consider running for Texas governor a Senate seat, USDA Secretary Booke Rollins said she remains focused on her current job.
“That is a ‘no’ right now for sure,” Rollins said. “We’ve got way too much to do be thinking about a potential run in the future.” Rollins is from Texas and served as policy director for former Gov. Rick Perry and spent 15 years as head of the Texas Public Policy Institute.
India aims to boost biofuel use: India is looking to increase its use of biofuels to strengthen energy security as disruptions to crude supplies push oil prices higher, Tarun Kapoor, an adviser in the Prime Minister’s Office, said on Wednesday, according to Reuters. Kapoor said India needs to use all available domestic resources to strengthen its energy security.The report said India, the world’s third-biggest oil importer and consumer, is conducting tests to blend some biofuels with diesel. It already blends ethanol with gasoline and uses mainly corn-, rice- and sugarcane-based feedstocks to produce ethanol. The report said New Delhi is also moving towards wider adoption of flex-fuel vehicles as it seeks to cut reliance on expensive energy imports and promote ethanol blends in gasoline.