11/06/25 China’s Trade Deal: What It Means for North Dakota Soybean Farmers
You're listening to In The Pod, soybean updates, a weekly trek into the latest soybean information from NDSU Extension. China and The US are working on a trade deal that includes buying US soybeans. What does this mean for North Dakota soybean farmers? Frayne Olsen, NDSU Extension crop economist, is here to provide some clarity. Frayne, considering the latest talk about the trade agreement with China, what do we know?
Frayne Olson:There is a lot of things that we don't know, but there are a few things that we do. First, China has agreed to come in and buy an additional minimum of 12,000,000 metric ton of US soybeans from The United States between now and the end of the year. Now for reference, last year at this time, they had bought about 18,900,000 metric ton during that same time period. The other part to the agreement was that China would purchase a minimum of 25,000,000 metric ton per year for the next three years. Again, for reference point, last year, they purchased about 22,500,000 metric tons. So, you know, this is an improvement. It's provided some stability in the marketplace. At least we know what the minimums and kind of what the expectations are.
Bruce Sundeen:What does this all actually mean?
Frayne Olson:We've seen the futures market respond fairly quickly to this news. I mean, even anticipation of an agreement. We saw soybean prices rise in the futures market. Now the other part for local farmers is, well, what about the basis levels, which is the cash market portion? We know that they're gonna buy an additional amount of US soybeans, but we don't know when the delivery of those soybeans will be. We need to continue to monitor the basis levels, the cash market, because the cash market's gonna have to figure out how do we get the soybeans from The US to the Chinese port. So they might purchase it now in the next couple weeks, but delivery may not be until December or even into January or February. So the timing of deliveries will have an impact on the basis levels, And those are things that we still don't know. So we'll have to watch that as we move forward in time.
Bruce Sundeen:What about North Dakota soybean farmers? What should they do?
Frayne Olson:I do think the futures market for soybeans will continue to be pretty volatile because we still anticipate a very large crop coming out of Brazil again that next year, and that's gonna have an impact on how much China buys now and how quickly they want delivery. So we still have to watch that. I do expect, again, basis levels to start to get less negative to recover. My recommendation is most of the soybeans farmers harvested are in the bin right now. Be watching the markets, local market cash prices very closely, and don't get too greedy. We will see an improvement, but it may not quite be the improvement you're hoping for. Because if US prices start to get too high, China will start to divert and purchase more soybeans from Brazil or other sources. So I do think we got some upward movement, but it may not be quite as much as people had hoped.
Bruce Sundeen:Frayne, what's the difference between the previous China agreement and the new one?
Frayne Olson:Okay. So the previous agreement, the previous phase one agreement was focused on a broader base of commodities, and it was really trying to target the dollar volume of purchase. How much dollars did they spend in The US agricultural sector? This time, it's a more narrowly, focused set of commodities, primarily soybeans and sorghum, and we're counting the volume purchased, not the value that's purchased. This will be important because it's a lot easier to measure and monitor volumes than it is to argue about the value or how many dollars has been spent.
Bruce Sundeen:Thanks, Frayne. Our guest has been Frayne Olson, NDSU Extension crops economist. You're listening to In The Pod, soybean updates, a weekly trek into the latest soybean information from NDSU Extension supported by the North Dakota Soybean Council.
