China undermines the US with Argentine soy purchases

The American president Trump caused a stir yesterday with his speech for the United Nations. This also affected the wheat market. Trump's Secretary of Commerce expressed support for Argentina, which is in severe economic trouble. The country eliminated the export tax on, among other things, soy. China reacted immediately and secured a large volume of Argentine soy. Analysts fear that this will come at the expense of American exports. The December wheat contract on the Matif closed yesterday €1 higher at €190 per ton. On the CBoT, wheat saw a stronger increase, rising 9¾ cents to $5.20½ per bushel. Corn also recorded higher and closed 4½ cents higher at $4.26¼ per bushel. Soy remained virtually flat, recording an increase of 1 cent to $10.12 per bushel. European wheat exports are lagging. Up to and including September 21, 4.12 million tons were exported, compared to 6.13 million tons in the same period last season, according to figures from the European Commission. Barley exports slightly increased to 1.85 million tons from 1.52 million tons last season. Ukraine is also exporting less grain than last season. Since the start of the season on July 1, 5.82 million tons of grain and legumes have been exported, 40% less than last year. Wheat accounts for the largest portion at 4 million tons but is 28% behind last season. Additionally, 791,000 tons of barley (-36%) and 893,000 tons of corn (-66%) crossed the border. There is demand for wheat, but countries are turning to other suppliers. Algeria had a tender for 50,000 tons but ultimately secured about 500,000 tons, presumably from South America and/or Australia. The price was between $259 and $261 C&F. Jordan bought 60,000 tons of wheat for $266 C&F, origin unknown. Thunderous sermon Trump's UN speech gave wheat in Chicago a boost. He pressured the EU to stop importing Russian energy, which he claims finances the Kremlin's war machine. Analysts see this as support for the tough stance Trump has taken against Putin in recent weeks. The situation for American soybean farmers is less favorable. Although Trump had a telephone consultation with his Chinese counterpart last Friday, the export of agricultural products was not discussed. So far, China has not purchased any soy from the new American harvest. Argentina is also reducing that necessity. Argentina's taxes suspended Argentina has suspended the export tax of 26% on soy until the end of October. This also applies to grains and meat. According to experts, this is an emergency measure by President Milei to quickly bring in dollars and regain confidence in the economy. China eagerly jumped on this and reportedly purchased between 650,000 and 1 million tons of soy in Argentina, according to various sources. This is a setback for the US, where Chinese orders typically come in around this time. Notably, the American Secretary of Commerce Scott Bessent publicly expressed support for Argentina. Milei is considered a loyal ally of Trump, but it is exceptional for the US to explicitly back the currency of another country.