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China could start making “substantial” purchases of US soybeans, America’s biggest agricultural export

A new trade deal could restart billions in soybean exports.

Hyunsoo Rim

Last year, China bought more than $12 billion worth of American soybeans. Since the summer, however, not a single bean has been shipped, one of many commodities that fell victim to the simmering trade tensions.

But China might be about to start buying American beans again. Soybean futures rose 2% to a five-month high in Chicago this morning, after Treasury Secretary Scott Bessent said China “will be making substantial purchases” as the two countries close in on a trade deal.

For American farmers, it’s a much-needed jolt of optimism, as soybeans are the country’s biggest agricultural export — worth $24.5 billion last year — according to the USDA

Soybeans
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China typically buys more than half of that total, so its absence this season has left US silos full and profits thin. Earlier this month, Washington outlined a bailout plan to help offset losses, but payments have been delayed by the government shutdown, leaving growers in limbo in the middle of harvest season.

Full of beans

If this soybean standoff feels familiar, it’s because we’ve been here before. Back in 2018, the US-China trade flare-up cut American soybean exports to China by 75% in a single year, prompting the government to roll out roughly $12 billion in emergency farm aid.

Meanwhile, China has already stocked up soybeans from Brazil and Argentina and is ramping up domestic production. Still, Bessent, himself a soybean farmer, said growers will be “extremely happy” with the upcoming deal “for this year and for the coming years,” in his interview with CBS News on Sunday.

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Oil settles Friday at highest level since start of war

US oil prices moved higher in afternoon trading Friday, sapping strength from the stock market as they posted their highest close since the start of the Iran war.

After another day where the Strait of Hormuz was essentially closed to global tanker traffic, US futures for West Texas Intermediate settled up 3.1% at $98.71 a barrel for an 8.6% weekly gain, per Dow Jones data.

American officials have discussed using the US Navy to escort tankers through the narrow waterway between Iran and Oman, but have said plans for such convoys are not ready yet. However, it is unclear if military convoys would bring an end to the war-related dislocations in the oil market.

“It could help,” Tom Liles, senior vice president of upstream research at energy consulting firm Rystad, told Sherwood News in a recent interview. “It could also go in a lot of different directions if a Navy ship is hit or if a tanker is hit.”

American officials have discussed using the US Navy to escort tankers through the narrow waterway between Iran and Oman, but have said plans for such convoys are not ready yet. However, it is unclear if military convoys would bring an end to the war-related dislocations in the oil market.

“It could help,” Tom Liles, senior vice president of upstream research at energy consulting firm Rystad, told Sherwood News in a recent interview. “It could also go in a lot of different directions if a Navy ship is hit or if a tanker is hit.”

markets

Memory stocks rebound off last weeks losses

Memory stocks Micron, Sandisk, Western Digital, and Seagate Technology Holdings rose again Friday, putting these crucial providers of chips for AI inference work on track for big weekly gains after last week’s steep losses following the outbreak of war with Iran.

There’s no obvious trigger for the move higher for these shares this week, other than a bit of a recovery in the AI trade more broadly — AI beneficiaries like IT cable and connections maker Amphenol and custom chip and networking company Marvell Technology clawed back some gains this week — perhaps due Oracle’s earnings earlier, and some mean reversion to boot.

Micron is due to report earnings after the close of trading on Wednesday, with the company catching a couple price target hikes this week, including one from Wedbush on Friday.

Sandisk is something of a different story, as its enormous gains over the last 12 months — roughly 1,200% — have made it a momentum play beloved by the retail crowd.

It was up about 20% this week at around 11 a.m. ET. And its nearly 170% gain this year keeps the stock on top of the S&P 500, in terms of price performance.

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