Grain market prepares for agreement between US and China

The summit later this week between Trump and Xi is causing a stir in the grain market. A bit of a head start is already being taken on an agreement, although that is by no means certain. The season for the winter grains of the 2026 harvest has started well. That is at least the conclusion we can draw from the Mars Bulletin published yesterday. The December contract for wheat on the Matif closed yesterday €3.25 higher at €193.50 per ton. Wheat also made a jump on the CBoT, with an increase of 13½ cents to $5.26 per bushel. Corn also went up, but here the increase was limited to 5½ to $4.28¾ per bushel. Soybeans closed the last trading session 25½ higher at $10.67¼ per bushel. The positive sentiment in the grain market is largely attributed by analysts to the positive developments surrounding the negotiations for a trade agreement between China and the US. According to US Treasury Secretary Scott Bessent, China has promised to make substantial purchases of soybeans in the US. Trump made it clear that he will travel to South Korea this coming Thursday to strike a deal with Chinese President Xi. No certainty Although optimism is gaining a bit of ground in the grain market, various experts point out that a trade agreement between China and the US is by no means guaranteed. The Trump administration announced last Friday that it will conduct a new investigation into trade flows. This slightly opens the door for new import tariffs. This increases the pressure on the already tense relations for the summit in South Korea, some analysts say. Of course, a lot of attention is being paid to the relationship between the US and China, but a trade agreement has already been reached with other countries during the summit in South Korea. Malaysia, Cambodia, Thailand, and Vietnam have reached an agreement with the US on mutual trade policy in recent days, various sources report. Representatives from American soybean and corn growers have reacted cautiously positively to this news. Reports from Russia are having little impact on the market. Ikar lowered the price for Russian wheat by $0.50 to $230.50 per ton. At the same time, the market bureau raises the export forecast for Russian wheat in October by 500,000 tons to 5.5 million tons. SovEcon kept the export forecast for October unchanged at 5.1 million tons. Good conditions in Europe In Europe, the sowing of winter grains is largely going smoothly, according to the JRC, the scientific office of the European Commission, in the new Mars Bulletin. Only in the northern part of Spain and Portugal is the start not as good as desired due to drought. On the other side of Europe, in Romania and Bulgaria, both the harvest and sowing of winter grains is experiencing delays due to wet conditions. In countries like Scandinavia, France, Germany, and Poland, the conditions are good. The winter crops could be sown on time and are emerging quickly and evenly. In the Benelux, the corn and potato harvest is nearly complete according to the JRC. The planned area for winter grains is already in the ground in the Benelux. Due to the shutdown of the US government, we are missing the weekly Crop Progress report for the fourth time. A Reuters poll shows that participants estimate that 72% of corn and 84% of soybeans in the US have been harvested. Last year this week, 81% of the corn was harvested and 89% of the soybeans. Of the planned area for wheat, 84% is in the ground according to Reuters.