Traders are becoming increasingly disappointed in the lack of Chinese business since the recent trade agreement was announced. China’s minister of commerce has now stated China wants to do more business with the U.S., but wants “a competitive price, good quality and sufficient supply” from a soybean trade partner. Price is the hang-up for U.S. soybeans as tariffs make ours the most expensive going into China. China has picked up its buying pace recently, but not consistently. China has agreed to buy 12 million metric tons of soybeans from the U.S. this marketing year that ends next August.

It is no secret China has been absent from the U.S. soybean market this year, but their buying from other sources has been quite active. This has led to record soybean stocks in China, with a port inventory reported at 10.3 mmt on Nov. 7. This compares to last year’s 3.6 mmt. Soybean crushers are also reporting a soybean inventory of 7.5 mmt, the highest volume since 2017. This has started to limit China’s soybean appetite from any source, especially the U.S. since we are the highest priced source in the global market.

Tariff uncertainty is weighing on all export trade as the odds of the Supreme Court supporting President Donald Trump’s tariffs is falling and now below 25 percent. A bigger question is if these tariffs are deemed illegal, will the U.S. have to repay the $200 billion in tariffs it has already collected. Importers are hesitant to book excessive volumes of U.S. commodities with the possibility of these fees being removed.

The state of the U.S. economy is becoming more of a market factor. Labor data shows U.S. layoffs in the month of October totaled 153,000, the highest number in 22 years. This brings unemployment data for the calendar year to 1 million, the highest since 2020. These job losses are being credited to increased use of Artificial Intelligence and businesses needing to cut expenses due to elevated tariffs costs. These losses may support further intertest rate cuts but will have a considerable impact on consumer spending.

This lack of consumer confidence was noted in the monthly report from the University of Michigan. According to U of M data, U.S. consumer confidence dropped by over 6 percent from a final October reading of 58.6 to a current index reading of 52.3. This decline was the result of a 17 percent decline in personal finances and an 11 percent decline in forward business expectations. The current sentiment reading is 50.3 which is also lower than the October index reading of 53.6. These readings, when combined with statements from the White House that some segments of the U.S. economy are in a recession, are starting to impact U.S. investor confidence.

One positive economic indicator was another decline in global food costs for the month of October. The United States’ Food and Agriculture Organization, the group that monitors world food costs, showed an index reading of 126.4 in October, down from 128.5 in September. This was the second consecutive month of declines. Global food costs had been creeping up, but peaked in July at a two-year high, and have now started to decline. This is mainly from a record world cereal grain production estimate of 2.99 billion mt, up 4.4 percent from a year ago. World food costs are now 21 percent off their March 2022 high.

The Brazilian analytical firm Safras updated its corn production figures for the country. Safras is now predicting a 2025/26 Brazil corn crop of 143.56 mmt, up from its prior estimate of 142.49 mmt. This increase was from a bump in the first crop estimate from a prior 25.47 mmt to a current 27.76 mmt. Favorable weather to start the growing season and an increase in plantings are behind the larger forecast. The USDA forecasted a Brazilian corn crop of 131 mmt in the September WASDE report.

China has also revised its 2025/26 production data. Chinese authorities are expecting a soybean crop of 20.9 mmt this year, nearly matching the USDA projection for 21 mmt. The country’s soybean imports for 2025/26 were held at 95.8 mmt, well below the 109.4 mmt from the 2024/25 marketing year. China maintains a corn crop forecast of 295 mmt despite considerable flood damage that not only was reported to impact production but also quality. Many private analysts have taken upward of 10 mmt off China’s forecasted crop. China is also only forecasting corn imports of 6 mmt this, half of recent years’ purchases.

The November cattle on feed report showed a Nov, 1 U.S. feedlot inventory of 11.7 million head. This was 2 percent less than a year ago and the lowest total in 75 years. October cattle placements were down a large 10 percent from a year ago at 1.99 million head. This was the lowest October placement total on record. October marketings were down 8 percent from last year at 1.7 million head. Even with the U.S. resuming Brazil beef imports, until these inventory numbers increase, cattle values will remain elevated.

Despite record U.S. beef cattle values, the U.S. dairy herd continues to expand. Data shows the dairy herd totaled 9.15 million head at the end of September, an increase of 36,000 head from August. This was also a large 235,000 head more than the U.S. had milking a year ago. As a result, U.S. milk production has increased 4 percent year to year, and pressured that complex over the past several months.

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