Soybeans Jump on Talk of China Re-Entering US Market

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🌱 Soybeans lead on China optimism
Soybean futures rallied Tuesday, with Nov ’26 up ~12¢ to ~$11.47 (two-week high) amid rumors China may return to the U.S. market. Optimism was also fueled by a potential September visit from Xi Jinping to Washington. Corn futures were mixed, pressured by weaker crude and favorable weather, while Chicago wheat rose on short-covering and technical buying; Kansas City wheat slipped.

🌎 USMCA talks add uncertainty to trade outlook
U.S. and Mexican officials are meeting in Washington this week to negotiate the future of USMCA, focusing on agriculture and energy. Tensions rose after President Trump संकेत he may not renew the deal. Mexico and Canada accounted for $58.6B in U.S. ag exports in 2025 (over one-third of the total), making the outcome critical—especially as China remains an inconsistent buyer. Another round of talks is set for mid-July in Mexico City.

🌧️ Weather mostly favorable, with storm risks
The Corn Belt is expected to see widespread rainfall over the next 5–7 days, supporting crop development. However, heavier totals in parts of MO, IL, KY, IA, and IN could cause localized flooding. Severe storms are possible today (damaging winds, hail, tornado risk), while cooler-than-normal temps are expected over the next 6–10 days.

⛽ Biofuels seen as key to demand growth
A study from S&P Global Energy highlights ethanol demand as the primary driver of corn usage growth (≈83% since 2000). Expanding E15 nationwide is viewed as the easiest path to boost demand, though Senate resistance remains. Without stronger biofuel demand, the report warns of a long-term oversupply in U.S. agriculture.

🌽 Acreage outlook edges higher
S&P Global Commodity Insights raised its 2026 acreage forecasts: corn at 96M acres (+800K vs. prior) and soybeans at 85.3M (+300K). That compares to 95.2M corn and 83.4M soybean acres last year. USDA last pegged 2026 acreage at 95.3M (corn) and 84.7M (beans), with updated figures due June 30.

Transcript

Soybean Rally

SPEAKER_00 0:08

Good morning, everybody. It is Wednesday, June 17th, about 5 30 a.m. Central Time as I speak. The grain markets are trading higher here this morning. I have Matt Bennett joining me. Joe is still on vacation. We're gonna start off this morning with the rally that we saw in soybean futures yesterday. The November 26th contract gained nearly 12 cents to close near 1147 per bushel, marking its highest level in nearly two weeks. The rally was driven by speculation that China may re-enter the U.S. market. Reports that President Xi Jinping could visit Washington, D.C. in September also boosted optimism as the visit could revive Chinese purchases of U.S. agricultural goods. In contrast, corn futures finished mixed, pressured by weaker crude oil prices and favorable weather forecasts. Chicago wheat futures ended higher on technical buying and short covering, while Kansas City wheat futures edged lower. So, uh Matt, do you think we're gonna see China actually re-enter this U.S. soybean market, or is this just wild speculation?

SPEAKER_01 1:15

Yeah, I mean, the thing is with China, of course, yesterday you came out, and basically what the rumor was is that they're hunting for uh, you know, oct to march delivery type soybeans. And so, you know, they're basically their fall program that we've been used to in the past, whereas, you know, like we go, uh the rumors were that they're not gonna do anything until September rolls around. And I don't think the trade really liked to hear that. And so, you know, regardless, they're supposed to buy 25 million tons. We all know that um, you know, you can take that with a grain of salt, but we also have to look at what they did this last winter, uh, whenever most of us were very um hesitant to believe, you know, that they were gonna step in and buy the beans they said they were gonna buy. They actually did buy those beans. So uh yesterday, you know, what did we see? Both corn and soybeans uh took off like a rocket just on that news. Um, obviously, corn kind of gave up, uh didn't really uh end up gaining a whole lot, but beans latched onto those. I think ultimately what it boils down to is that uh those markets can be pretty excited to see if we get that kind of export demand, given the fact that we've got such great domestic crush demand. So uh any good news out of China on the export front certainly going to be supportive towards markets.

SPEAKER_00 2:26

You touched on uh corn futures, how they pulled back yesterday. Talk about what um the headwinds essentially that are basically standing in the way of corn futures.

SPEAKER_01 2:35

Yeah, I mean, ultimately, whenever you look at corn, we've got one heck of a good start. Yeah, I mean, 67, 68% then uh this week as far as good to excellent ratings. That's not as good as what we've ever seen, but it's certainly one heck of a good start overall. Uh, whenever you stop and think about it, obviously a lot of people this spring have had a rough go trying to get the crop in the ground. But then overall, you know, the country was able to get uh the corn crop in the ground right on time. And so when you look at the grand total, a grand scheme of things, uh people are looking at this corn crop as being in really good shape to get uh off to a good start. Now, you look at demand, and obviously demand's been very strong. Uh ethanol demand's been solid, export demand's just been phenomenal, uh, but at the same time, you're you're latched on to two billion bushels still that you're gonna carry into new crop. And so I think that's one of the biggest headwinds you've got is that we're gonna have enough corn to get by for this summer. We know that for sure. And yes, we're probably gonna scale back on acreage, but uh you can scale back on acreage if you still end up with a yield in the

USMCA

SPEAKER_01 3:38

180s, which is what most people are trying to kind of uh point this uh this crop in the direction of at least to start out.

SPEAKER_00 3:45

Right. And we'll talk about some acreage numbers here in a bit. Um, U.S. and Mexican officials are meeting this week in Washington, D.C. to continue negotiations over the future of the U.S.-Mexico-Canada agreement. Talks began yesterday and are set to continue today with the focus on agriculture and energy. The negotiations come amid renewed uncertainty after President Trump said last week he is not planning to renew the deal, arguing that the U.S. doesn't need anything from Canada or Mexico. Mexico and Canada accounted for more than $58.6 billion in U.S. farm exports last year, making up more than one-third of total U.S. agricultural trade. A third round of negotiations is scheduled for mid-July in Mexico City. So, Matt, elaborate on the importance of the US MCA agreement to agriculture.

SPEAKER_01 4:35

Yeah, I mean, I don't know if he's just trying one of his uh quote unquote negotiation tactics or what, but uh to say that we don't need uh Mexico and Canada is a pretty uh asinine comment to make. And so uh there's no question about it. I mean, Mexico has gobbled up corn like it's going out of style. I mean, it's no secret that those cattle have stayed south at the border for several months now, and we're shipping corn to them, they're feeding the cattle. Uh that beef's gonna end up showing up on this side of the border at some point, but uh certainly it's not walking across. You know, we're gonna we're shipping the corn down there to them. Uh, been the number one destination for corn exports. We've got a rail system specifically designed to efficiently get them corn. And so, you know, it's ridiculous to think that uh we don't need them. Meanwhile, you look at Canada, of course, we buy, I believe it's around 80% of the potash comes out of Canada. Uh potash has been the only thing on the fertilizer front over the last several months that's not uh uh been a major uh you know thorn on our side. I mean, it's been reasonably expensive or uh cheap compared to everything else, particularly phosphate. So uh we certainly need them as trading partners. Uh maybe they look at it the same way we do

Weather

SPEAKER_01 5:50

that he's probably just trying to negotiate a better deal. But uh, you know, Lord uh knows we don't need him to screw this one up.

SPEAKER_00 5:56

Most definitely. On to uh weather, favorable, favorable weather is expected across the Corn Belt in the near term, along with possible severe storms. Over the next five to seven days, much of the region is forecast to receive widespread rainfall. Heavier totals are likely across parts of Missouri, Illinois, Kentucky, Iowa, and Indiana, where excessive rainfall could lead to localized flooding. A significant severe weather event is possible from Missouri through Indiana today, with risks including damaging winds, large hail, and potential tornadoes. Temperatures are expected to run below normal over the next six to 10 days. Overall, the outlook remains supportive for crop development, but the market is keeping a close eye on pockets of excessive rainfall that could begin to weigh on crop conditions. What have you been seeing for weather in your area and also elaborate in uh elaborate on crop conditions in your area?

SPEAKER_01 6:50

Yeah, so our year our area basically had three windows to plant in this uh spring. I mean, it was they were small windows, but as we all know, you can run equipment over a ton of acres if you get the right conditions. We were able to get the crop in the ground in good shape. We did have some replant. It wasn't significant, you know. It was uh maybe uh it was less than 10% of both corn and soybeans. Uh we were able to get in there and plant there in late May uh and get all that replant done. And then the following Monday, uh, about 48 hours later, you know, we had three and a half inches of rain where we'd done most of the replant. So we filled those ponds back in. Most likely, uh, we're not going to be able to get back into those because quite frankly, we haven't dried out a whole lot. And so whenever we talk about weather, I'm not complaining, uh, McKenzie. Our crops look good. I mean, it's not uh 100% stand everywhere due to how much rainfall we've had, but uh just goes to show you if you you know put the other hat on, uh, we can't hardly get our hay uh mode raked and bailed right now because we just haven't had the windows to do it. And so we've got some of it done, but we certainly haven't gotten all of it. I would say our crop has gotten off to the kind of start that we could have uh incredible yields. One concern, of course, a lot of folks have whenever you start getting this warm and this much moisture is that uh what if you see some nitrogen loss? Is that possible? Absolutely. If you keep these soil saturated, uh you could see some denitrification. But right now, I mean, uh I'm pretty happy with it. Last thing I'll say about the crop overall, you know, is that a big chunk of the U.S. is still in some level of drought, but not where it matters for this corn crop. Uh, there's no question that uh a lot of folks have had ample, if not too much, but at least ample moisture and an interopter, really good uh start from a moisture standpoint. It looks like have a really good chance of going towards the pollination time frame uh with plenty of moisture in the ground.

SPEAKER_00 8:47

Have you heard of areas where um the amount of rainfall, the excessive rainfall is starting to negatively impact the crop, or are things still looking good?

SPEAKER_01 8:56

Yeah, I mean, whenever you looked at crop ratings this week uh for Iowa, you know, they went down 5% week on week. And a lot of that is due to uh eastern part of the state. Uh, you know, some areas have just continued to get hit with uh too much rainfall. And so uh, you know, it's pretty hard to take the market higher on too much rainfall. We've uh tried to do it before in the past, but ultimately uh the market knows that rain makes grain. But certainly there are growers, uh, you know, whether you're talking in Iowa, a large part of Missouri as well. You know, I've got growers that have bottom ground that is flooded out, you know, and they've had a heck of a time getting out ahead of that because uh, you know, they just had way too much rainfall uh consistently. And so, you know, there are parts of the world, uh particularly there, that I believe have had too much rainfall. But, you know, again, uh,

Biofuels

SPEAKER_01 9:46

whenever the corn belt's getting this much rain, it's hard to get this market fired up.

SPEAKER_00 9:50

Right. Uh according to a new study from SP Global uh Global Energy, expanding biofuel demand, specifically ethanol, is the most effective way to absorb rising corn supplies and support farm incomes. Ethanol expansion has driven roughly 83% of the growth in corn demand since 2000, underscoring the sector's importance. Year-round nationwide sales of E-15 are widely viewed as the easiest way to unlock new demand. While the House passed E-15 legislation last month, the measure faces a tougher road in the Senate due to political pushback and refining industry opposition. The study warns that without meaningful growth in biofuel demand, U.S. agriculture may face a prolonged structural oversupply. In your opinion, how uh how dependent is future farm profitability on policy-driven biofuel demand like E-15 expansion?

SPEAKER_01 10:43

Yeah, I mean, I would agree with the study essentially. Uh bottom line here, McKinsey, is that we've got pretty stiff competition coming out of uh South America. Okay. And so uh when you look, for instance, at Brazil, obviously Brazil keeps growing and corn production. Nothing like they've grown uh with soybeans. Soybeans has been such a massive expansion. But, you know, what have they looked at doing over the course of time? Of course, sugarcane ethanol was their number one uh the direction that they went as far as renewable fuels went. But uh they've started actually with a fair amount of corn-based ethanol and continue to grow that industry. Uh they've also seen over the course of time, you know, going from E10 to E15 all the way to E30, uh, because they know that uh the products that they're growing their home, they can use them domestically for their fuel supply. So uh that's uh something that we need to be looking at as well. I mean, clearly the energy lobby is a massive one. Uh uh, as you suggested, you know, the Senate may have a hard time getting it passed, and it's about politics. It's not necessarily about uh, you know, whether it's something that we can use here domestically. I know a lot of people have different opinions uh, you know, on whether ethanol is something that we should be uh uh pushing, but ultimately if ethanol works and and does not have to be subsidized, uh that would certainly be something that we would want to be looking forward to uh on the renewable diesel front. I mean, there's no question that uh our ability uh to still raise a big crop and it'd be worth anything whatsoever, we're gonna have to use those beans domestically, you know, for renewable diesel because uh our exports are gonna continue to dwindle uh now that Brazil is easily beating us as far as the world's largest soybean crop.

SPEAKER_00 12:23

What does it mean uh for corn prices if uh that if E-15 policy support stalls, if we do see this basically just remain stagnant?

SPEAKER_01 12:33

Yeah, I mean, one thing to remember about the E-15 policy is that you know, right now you're talking about uh year-round ability to use it. I mean, it's not like necessarily a mandate. If it stalls out, I think it's gonna be one more thing that people will um be frustrated enough that they're not gonna want to buy this corn market. You know, they're gonna, hey, export demand's been phenomenal, we know that, but we need to be clicking on all cylinders when you're raising uh this last year, you know, 186 and a half yield on you know 98.5 million acres or whatever we ended up at. I mean, it's just a massive crop. This year, yeah, you're gonna probably have a few less acres. There's no doubt fertilizer and input costs are a little bit of a headwind, you know. But if you end up at uh whatever um, you know, 95, 96 million acres at a 183 or 4, you know, you're gonna have a hard time if you don't have a source of demand that continues to grow. So I don't think that it's gonna be positive towards price action, you know, if you have to stall this thing out and you continue to just uh banging your head against the wall. I mean, the ethanol industry is is a mature industry, you know, and you need something to continue uh to keep that industry afloat uh as far as the demand goes. And if

S&P Global Raises Agreage Estimates

SPEAKER_01 13:44

we don't go E15, uh I don't think it's gonna be a good thing for us from a price action standpoint.

SPEAKER_00 13:49

SP Global Commodity Insights has raised its forecast for U.S. corn and soybean acres. The firm estimates 2026 corn acreage will reach 96 million, an increase of 800,000 acres from its mid-March forecast. U.S. farmers planted 95.2 million acres of corn last season. The firm also raised its outlook for soybean acreage to 85.3 million, up 300,000 acres from its prior estimate last season. Farmers planted an estimated 83.4 million acres. Uh the USDA projected 2026 U.S. corn acreage at 95.3 million in its March prospective plantings report. Soybean acreage was estimated at 85, 84.7 million. Uh the USDA is scheduled to release its updated acreage figures on June 30th. Matt, what are your thoughts on these upward revisions?

SPEAKER_01 14:37

You know, if you if you come up with those kind of acreage numbers, McKenzie, it's 181.3. I mean, that's certainly a possibility. I don't think this is going to be a big year for Prevent Plant, for instance. So uh there's certainly a chance you could get to those type of figures. Uh there was certainly a lot of chatter this spring about uh growers that had not purchased fertilizer, you know, opting to go the soybean route. I know uh some of my growers that I work with down, for instance, in Louisiana that were super heavy corn, you know, that those acres went to beans this year for the most part. I mean, they they say you got to drive around a little bit to see a cornfield in their part of the world. Yes, that's not the breadbasket of the corn belt, but you get into parts of the both Dakotas, and you know, there's no doubt that uh some growers elected uh that didn't get their inputs bought, you know, to go the soybean route. So uh, but at the same time, corn rallied to five bucks, you know. And so you've got to ask yourself, would that kind of rally uh did some other growers decide to go heavy corn? And uh it's something that we're trying to get our heads wrapped around right now as we put our acreage number together. Uh, I'm not saying that they're wrong. My tendency would be to believe that the USDA was a bit high for March intentions, but as Joe and I have talked a couple times, that March number is such a jacked-up number. Uh uh, you never know whether it was right or whether it was wrong. So uh we're trying to survey our growers, just try to compare it to last year, you know, and over a wide variety of them, uh try to get our heads wrapped around exactly where we're at. But I I would say personally, 96 sounds just a bit high right now, but their B number could be dead on.

SPEAKER_00 16:14

Uh cattle futures were sharply higher yesterday. Live cattle were 360 to 595 higher. Feeder saw gains ranging from 533 up to 688. What are your thoughts on this cattle market?

SPEAKER_01 16:24

Yeah, I mean, there's no question that uh some of the money flow uh seems to be coming back into this market. Uh, you know, people aren't near as worried. Uh, screw worms, something that everyone worried about for quite some time. It was almost a sell the rumor by the fact type situation with cattle, but uh we know from a fundamental standpoint that cattle are gonna be strong. We know from a seasonal standpoint demand's gonna be sky high. So I wasn't surprised uh to see those types of uh market moves there on Tuesday. You know, do I think we're gonna race and just continue to make new highs throughout the year? I think there's enough uncertainty that might be a tough uh thing to ask for, but uh by all means, uh demand's alive and well, and uh speculators don't seem to be too phased just yet.

SPEAKER_00 17:07

Definitely. Alrighty, Matt. Thank you for joining me here this morning. Everyone, have a fantastic day, and we will be back tomorrow.