China to buy 12 MMT of beans this year and 25 MMT the next 3 years.

It was a wild and woolly night session as overnight grain strength initially faded after testing midweek highs. The momentum collapsed once the U.S.–China meeting concluded without meaningful detail. The market quickly fell into a “buy the rumor, sell the fact” mode, shedding early gains as traders saw no concrete commitments.

However, sentiment shifted in the early morning hours after Treasury Secretary Bessent confirmed that China will purchase up to 12 million metric tons of soybeans this calendar year, and as much as 25 million metric tons over the next three years. That news launched soybeans to new highs for the year in early trading, while corn re-challenged its weekly highs.

So far, China has reportedly already purchased three cargoes of soybeans, though the current trade arrangement appears more like a handshake than a binding agreement. The market is running on trust that China will follow through, knowing that President Trump could retaliate swiftly if they do not.

In addition, tariffs related to fentanyl are being reduced as part of China’s agreement to crack down more aggressively on illegal production and trafficking of the substance. This policy concession is being seen as a gesture of goodwill and commitment to broader cooperation.

Gains are limited in the near term, as the trade wants to see more physical action before advancing further. Given that the weather in South America is mostly favorable, the grain trade is in a cautious but optimistic price mode. This opens the door for corrections, as farmer selling will likely increase after having held back a portion of selling interest. Look for the gaps on the charts made Sunday night to be significant support values on setbacks. (424-426 December corn, 1063-1070 January beans).

Yesterday’s relief rally in cattle saw feeder cattle briefly challenge limit up mid-session before settling back with gains of $9.00 plus in the feeders, while live cattle showed gains of over $4.00. Cash markets are mostly quiet with live sales off eight dollars from last week. Cattle slaughter through midweek is at 343,000 head, a gain of 16,000 last week, but still 28,000 less than a year ago. Encouragingly, boxed beef continues to climb this week, with both choice and select up over $1.73.

After experiencing substantial losses last week through early this week, the trade needs to see follow-through action that the rumors of tariff reductions on Brazilian beef, and whether Mexico will be allowed to send some amount of feeder cattle north into the US needs to develop, or another sharp recovery rally will develop again today into next week. Technically, the first shoe has dropped, and now it’s a matter of whether the second shoe does or not.