Key Points
- Soybeans gained over 10% in October, their biggest monthly rise since January 2022.
- CBOT soybeans traded near $11.10 per bushel, extending gains on improved export sentiment.
- China pledged to buy 12 million metric tons of U.S. soybeans through January, and 25 million tons annually for the next three years.
Soybean futures surged in October, driven by renewed optimism over agricultural trade between the U.S. and China. The rally capped a volatile month for commodities, as political progress and trade diplomacy overshadowed earlier concerns about weak global demand and high production costs.
Trade Truce and Purchase Commitments
The rally gained momentum after U.S. President Donald Trump announced that Beijing had agreed to ramp up imports of American soybeans as part of a new trade truce.
Under the deal, China is set to purchase 12 million metric tons of soybeans by January and an average of 25 million tons per year through the next three years, according to U.S. Treasury Secretary Scott Bessent.
Trump said the agreement also involves tariff reductions and cooperation on the illicit fentanyl trade, while ensuring continued Chinese exports of rare earth materials critical to U.S. industries.
The news was welcomed by U.S. farmers, many of whom have faced falling profit margins amid high input costs and subdued export demand. However, analysts remain cautious about the lack of clarity over the timeline and structure of the purchase commitments.
Technical Analysis
Soybean futures climbed to around $10.89 per bushel, extending their October rally as traders reacted positively to the Trump–Xi meeting, which rekindled optimism around agricultural trade flows between the U.S. and China.
The pair’s reaffirmed cooperation on food security and supply chain stability lifted sentiment in grain markets, fuelling expectations of stronger Chinese import demand.
Technically, the chart shows a clear bullish breakout, with prices surging past the previous resistance zone near $10.80, supported by the short-term moving averages (5, 10, and 30) aligning upward.
The MACD indicator confirms strong bullish momentum, with widening histogram bars and a positive crossover that suggests further upside potential.
The rally builds on a strong recovery from August lows around $9.60, reflecting improved U.S. export demand and easing inventory concerns.
However, with prices now approaching overbought territory, traders may look for profit-taking near the $11.00 psychological mark, while maintaining a generally bullish bias as long as price action stays above $10.50 support.
Outlook
Soybean prices are likely to remain supported in the short term as traders await concrete shipment data confirming China’s new purchases.
Any signs of delay or partial fulfilment could weigh on sentiment. In contrast, confirmation of delivery volumes would likely drive further upside momentum heading into the final quarter of the year.
