Soybeans react as US-China negotiations progress

This week's Grão Direto Expert Analysis brings news about soybean prices and expectations surrounding trade negotiations between the United States and China. The upcoming new USDA report, unstable prices and weakened demand for corn are also highlighted. Check it out: 

How did the soybean market behave?

Negotiations between China and the USA: Trade tensions between the United States and China continued to influence the market. Although obstacles remain that limit Chinese purchases, a new round of negotiations announced at the end of the week brought moderate optimism, reflected in small increases in Chicago prices.

Climate and planting in the USA: Weather conditions in the Corn Belt remained favorable, with 84% of the soybean area already planted and 67% of the crops rated as good to excellent. The good progress of the American harvest limited price gains, even in the face of the turbulent geopolitical environment.

Adjustments before USDA: The market adjusted positions throughout the week awaiting the global supply and demand report (WASDE), scheduled for 11/06. Amid preparations for the new data and the slight recovery in premiums, Brazilian soybean prices remained stable, despite the volatility in Chicago.

In Chicago, the July 2025 soybean contract closed at US$10,58 per bushel, up 1,54% on the week. The March 2026 contract also rose, closing at US$10,60 per bushel, a gain of 0,95% over the period. The dollar fell 2,62%, closing the week at R$5,57. In the physical market, prices rose slightly in most regions, in line with the positive scenario for futures contracts.

What to expect from the soybean market?

Tight margins for the 2025/26 harvest: Producers must pay close attention to the scenarios that are emerging for the next soybean harvest (2025/26). As the second corn harvest advances, soybean planning and costing begins in an environment of pressured margins. The current trend indicates a possible maintenance — or even increase — of the planted area as a way of diluting costs and trying to ensure profitability. However, this strategy depends heavily on the weather and productivity to generate the expected results.

In the short term, the scenario remains quite challenging in regions such as Mato Grosso, northern Goiás, Tocantins and the entire Matopiba region. In these areas, especially among producers with leased land, current price and cost levels are already indicating negative margins. This situation is a warning sign, as there may be a disincentive to planting in some areas, which, in itself, does not guarantee a positive reaction in market prices.

US-China Negotiations: In the international market, soybean contracts are finding support on the Chicago Stock Exchange in light of signs of a possible resumption of trade negotiations between the United States and China. A meeting between Donald Trump and Xi Jinping is scheduled for Monday to discuss import tariffs, which is generating market expectations.

China still has open positions to meet demand in August and September, before the new US harvest begins. This window creates room for additional purchases in the short term, provided there is progress in trade negotiations. In light of this, Chicago is attempting a technical recovery, trading slightly higher, a movement that could continue throughout the week if progress is made in negotiations.

Dollar: The foreign exchange market continues to react to the fiscal measures announced by the Brazilian government, such as the end of the Income Tax exemption for LCI and LCA and the increase in taxation on bets, which should be made official in the coming days.

Abroad, attention is turning to the meeting between the US and China in London, which could define the next steps regarding import tariffs. These factors bring volatility to the markets and could directly influence the exchange rate, with indirect impacts on agricultural prices in Brazil.

This week, the soybean market should continue to move more because of news from abroad than because of any changes here. Talks between China and the United States and the rise and fall of the dollar could affect prices. Therefore, it is important to keep an eye on these factors, because they should dictate the pace of the market in the coming days.

How did the corn market behave?

American harvest: In the United States, corn planting has advanced to 93% of the planned area, with 69% of the crops in good to excellent condition. Favorable weather continues to support good expectations for the harvest, although prices have fluctuated during the week.

Volatility: After successive falls, corn futures contracts attempted a recovery in Chicago, driven by reports of drought in China and rain in the US. B3 followed this movement punctually, but the physical market in Brazil remained stuck, reflecting a cautious scenario.

2025 Off-season: In Brazil, the second crop harvest progressed slowly, reaching only 0,8% of the area — below the 3,7% of the same period in 2024.

In Chicago, the July 2025 corn contract closed at US$4,42 per bushel, down slightly by 0,23% on the week. On the B3, the July 2025 contract rose 2,52%, closing at R$64,57 per bag. In the physical market, however, downward pressure prevailed, with declines recorded in most regions.

What to expect from the corn market?

Pressured demand in the 2nd harvest: Production estimates for second-crop corn remain high, with projections ranging from 105 to 108 million tons. However, despite the prospect of good supply, the demand side remains under pressure.

The animal protein industry continues to be the main buyer, but is still feeling the impacts of the sanitary embargoes imposed after the isolated case of bird flu in Montenegro (RS). Brazil maintains restrictions with around 40 countries, although there is an expectation that the blockade on the state of Rio Grande do Sul will be lifted as early as next week — which could reopen part of the external demand.

In the domestic market, ethanol plants, which traditionally operate throughout the year, have been adopting a more cautious stance. With high inventories and tight margins, these units are buying corn in the short term, in operations known as “hand to mouth”. The recent drop in fuel prices, influenced by Petrobras’ parity policy and the pressure of oil on ethanol, has reduced the competitiveness of biofuel. This scenario limits the appetite of plants and prevents more consistent upward movements in corn prices, even with constant demand.

Harvest progress: The second corn harvest is beginning to gain pace in the Midwest, despite occasional rains that may still cause localized delays. Field work is expected to accelerate significantly over the next two weeks.

With corn entering the market, prices are already showing signs of falling in some regions. In northern Mato Grosso — in regions such as Sinop, Sorriso and Itanhangá — there are reports of deals below R$40,00 per bag. The pressure is due to the combination of increased supply and misalignment with the export parity (PPI).

Meanwhile, farms in the South and Southeast continue to pay prices higher than the export reference, which shows that demand from the animal protein industry is still strong. However, in the international scenario, recent agreements between the United States and Asian countries — traditional customers of Brazilian corn — increase competitiveness in the international market and tend to put even more pressure on the export prices of Brazilian corn.

Even with farms in the South and Southeast buying well, the corn market remains under pressure. The harvest is gaining pace, there is a lot of corn entering the market and, at the same time, ethanol plants are buying little. Abroad, Brazil is facing more competition from other exporters, which is also weighing on prices. With all this, producers can expect a week of lower and unstable prices, with little room for reaction in the short term.