China Signals Renewed Ag Trade with U.S.

Chinese news media signaled that a revival of agricultural trade with the United States is coming. Soybean purchases by state-owned companies have begun, immediately driving up soybean prices in Chicago. Chinese officials wary of downward pressure on domestic prices will have to carefully consider how broader purchases of U.S. commodities could impact their own fragile markets in China.

On July 2, 2026 Chinese Ministry of Commerce spokesman He Yadong told a press conference that China and the U.S. have agreed in principle to include agricultural products in negotiations for reciprocal tariff reductions. He said enterprises will conduct trade independently based on market principles, actual demand, and market conditions. China is willing to work with the U.S. to create favorable condition for bilateral agricultural trade, the spokesman said. 

While this response conveyed no specifics, it contrasts with a November 13, 2025 press conference where the same spokesman refused to confirm the White House's report that China had agreed at the October 30 China-U.S. summit in Busan, South Korea to buy 12 million metric tons of U.S. soybeans in 2025 and 25 mmt during 2026-28. No Chinese official has ever publicly confirmed this commitment, but the 12-mmt target was met after about 7 months.

Unlike last year's refusal, the July 2, 2026 Ministry of Commerce release included a video of the spokesman obviously reading from a written response to answer the question on U.S. ag tariffs. An essentially identical text was reported in the English-language China Daily (also on July 2)--China's mouthpiece to the outside world. Earlier, on June 25, the Ministry had reported progress on negotiations, including an endorsement of renewed agricultural trade with the U.S., also reported in China Daily.

On July 2, Bloomberg's Hallie Gu reported on the Ministry of Commerce statement. The remarks followed a June 30 phone call between Chinese Foreign Minister Wang Yi and U.S. Secretary of State Marco Rubio, although the discussion appears to have mainly concerned Taiwan.

The negotiations are expected to result in cancellation or waiver of the U.S. 10% duty meant to punish China for failing to curb fentanyl trade, and China would cancel or waive the 10% duty it imposed to match the U.S. duty.  

Rumors swirled about renewed Chinese buying of soybeans and corn, including rumors that China's COFCO was preparing to purchase 6 or more cargoes of U.S. soybeans for shipment in the Fall. 

Rumors were confirmed by a July 8 USDA Flash Sale report of 472,000 metric tons of soybeans sold to China, including 136,000 metric tons of old crop 2025/26 beans and 336,000 metric tons from the 2026/27 marketing year. 

A July 7 article on a Chinese edible oils market site observed that soybean futures on the Chicago Board of Trade had closed at their highest level in more than a month following rumors of Chinese purchases. The article filled in details about prices and shipments provided by traders in Singapore and China who said the rumors had been circulating since the previous week. The traders passed on reports they heard that China's grain and soybean stockpiler, Sinograin, had been establishing long positions equivalent to 2 million metric tons per week in preparation for purchases of U.S. soybeans. A Chinese trader said the rise in CBOT soybean prices had been magnified by attracting money from investment funds. The author of the Chinese article speculated that purchases could reach 12 million metric tons by August if the reported pace was sustained. 

Academics have also been allowed to voice support for normalization of ag trade ties with the U.S. A June 30 commentary by a Shanghai Foreign Trade University academic in a State-controlled financial media outlet hailed the June 25 Ministry of Commerce announcement as a portent of renewed "trade cooperation" between the U.S. and China in aircraft and agricultural products. Pointing to complementarities in agricultural trade between the two countries, the professor noted that the American Soybean Association had sent a letter urging President Trump reach an agreement with China.

On July 7, another commentary in the same outlet by the director of an international trade institute at Zhongshan University specifically endorsed resumption of agricultural trade with the U.S., going into more detail on complementarities, and he called for shaping a new mutually beneficial ecosystem for agricultural cooperation. He recommended a Chinese strategy of establishing joint U.S.-China laboratories and R&D centers that the U.S. has flatly rejected in past years. 

There have been rumors of Chinese buying of U.S. corn, but no actual purchases. CBOT corn prices rose from $4.25 per bushel on July 2 to $4.42 on July 7, before falling to $4.35 on July 8. Corn prices have also been impacted by concerns about high temperatures and scattered flooding in the U.S. Midwest.

China's stockpiler is playing a delicate game in domestic grain markets. During the Spring months Sinograin tried to fill a feed grain deficit--due to a poorer-than-admitted corn crop last fall--by injecting old reserves of imported corn, aging wheat, and degraded rice into the market to meet needs of feed mills. Now Chinese prices of grains and soymeal seem to be under downward pressure. Cheap wheat from the recent harvest, including a larger than normal supply of off-grade wheat, has provided another corn substitute for feed mills. At the same time, Sinograin has been buying corn in Northeastern provinces to support corn prices in the major production region. 

An influx of imported corn would put further pressure on Chinese prices in a weak Chinese economy struggling to stave off the return of deflation. Thus, any purchases of U.S. corn would likely go straight into government warehouses.