FOCUS ON AG

Written by Kent Thiesse, Farm Management Analyst

November 3, 2025

CHINA TRADE DEAL CREATES OPTIMISM FOR SOYBEAN MARKETS

After months of uncertainty and angst among farmers and grain traders, the new U.S. trade deal with China
announced on October 30 provided some stability and certainty to the soybean market. Soybean market prices
had struggled for most of 2025 due to a lack of soybean export sales commitments to China and other countries,
as well as a fairly large 2025 U.S. soybean crop being projected by USDA in September. There was some
thought that USDA may revise the 2025 U.S. average soybean yield and total production slightly lower in
October; however, USDA has not issued any updated yield data or crop reports since mid-September due to the
federal government shutdown. So, the announcement of the China soybean purchases and other recent trade
deal have been the most positive factor to influence the soybean market in many months.

The U.S. trade deal with China focused on a wide-range of products, import of rare minerals, technical
software, etc. The tariff on Chinese goods being imported into the U.S. was reduced by 10 percent, from 57
percent to 47 percent. From an agricultural standpoint, the big news was that China committed to purchased 12
million metric tons, or 441 million bushels, of U.S. soybeans in the next three months until the end of January,
2026. In a typical year, China books most of its soybean sales from the U.S. in the Fall of the year. As of mid-
October, China had not made any purchases of U.S. soybeans for the 2025-26 marketing year, which runs from
September 1, 2025 through August 31, 2026. China also lowered tariffs on other agricultural imports from the
U.S.

China also committed to purchase a minimum of 25 million metric tons per year, or 918 million bushels
annually, of U.S. soybeans for the next three years, beginning in 2026. The proposed three-year Chinese
soybean purchase commitment would bring the level of purchases nearly back to the 2023-24 U.S. soybean
export level to China of 27 million metric tons or 992 million bushels. The Chinese exports represented 54
percent of the 1.87 billion bushels of total U.S. soybean exports in the 2023-24 marketing year. Two years
earlier in the 2022-23 marketing year, the U.S. exported 1.16 billion bushels of soybeans to China. Following
the Phase 1 trade deal with China in 2020, U.S. soybean exports totaled 2.26 billion bushels, with 1.26 billion
bushels being sold to China.

USDA also recently announced commitments of soybean sales totaling 19 million metric tons, or almost 700
million bushels, of U.S. soybeans to other countries in the coming year, mainly countries from southeast Asia.
In the September World Supply and Demand Report (WASDE), USDA estimated total U.S. soybean exports at
1.74 billion bushels for the 2024-25 marketing year, and projected total exports for 2025-26 to be near 1.7
billion bushels. It is not known what level of the newly announced soybean purchases by China or soybean
sales to other countries were already factored into the export projections, or what impact these sales may have
on future USDA estimates. The October WASDE report was eliminated by the Federal government shutdown.
The next WASDE report is scheduled to be released on November 10. And will also likely be cancelled.

Soybean market prices had a very positive response in late October in reaction to the positive news regarding
the new trade deal with China and potential soybean sales to other countries. The 2025 November futures price
on the Chicago Board of Trade (CBOT) reached $11.08 per bushel on October 30, which was the highest price
for November futures in over 12 months. The CBOT November futures price improved by $1.06 per bushel
from the September 30 price of $10.03 per bushel. By comparison, the CBOT nearby November futures price at
the end of October in 2024 was only $10.10 per bushel.

It should be pointed out, that the rise in the CBOT soybean futures price does not necessarily mean that profit
margins for the 2025 soybean crop are now positive. First of all, many farmers have already sold a majority of
their 2025 soybean crop and may not be able to take advantage of the recent price increase. The soybean sales
were necessary to generate needed income for cash flow purposes to pay remaining 2025 crop expenses and
second half land rent payments, as well as for other ongoing farm expenses and loan payments.
In addition, the cash soybean prices being offered to farmers in many portions of Upper Midwest are far lower
than the listed CBOT futures prices, due to very wide “basis” levels. “Basis” is the difference between the local
cash price in a given month and the CBOT futures price for that month. Fall harvest basis levels have been $.75
to $1.00 per bushel or more below November CBOT prices at many locations in North and South Dakota
Nebraska, western Minnesota and much of Wisconsin. Basis levels have been slightly tighter in the eastern
Corn Belt, as well as near soybean processing plants. The widest basis levels have been in areas that rely
heavily on shipping soybeans by rail to Pacific Ocean ports for export to China and other Asian countries. It is
hoped that basis levels in many areas should improve in the coming months, once the soybean exports increase.

Based on Southern Minnesota Farm Business Management (FBM) records, the average total direct cost in 2024
for seed, fertilizer, chemicals, fuel, etc. on cash rental acres, as well the land rent cost, was near $550 per acre
for soybeans, which is probably similar to 2025 crop expenses. The 2024 FBM records showed an average of
$80 per acre for machinery and overhead expenses for soybeans. If you include a modest return to the farm
operator of $60 per acre for labor and management, the total estimated cost to produce an acre of soybeans is
approximately $690 per acre. The breakeven soybean price to cover the total cost of production and land rent
would be about $11.50 per bushel with a yield of 60 bushels per acre, which would increase to approximately
$12.55 per bushel with a yield of 55 bushels per acre and drop to $10.62 per bushel at 65 bushels per acre. The
current cash soybean price at many locations in the Upper Midwest is still below $10.00 per bushel.

Simple Method to Estimate Potential 2025 Crop Insurance Payments

Corn and soybean yields in many portions in the Midwest have been good-to-excellent in 2025; however, there
are areas that had below average yields due to weather, diseases, or other issues, which may qualify for 2025
crop insurance indemnity payments. Farmers that utilized “optional units” for their 2025 crop insurance
coverage may have individual farm units with yield losses, even if overall yields are strong. The 2025 crop
insurance harvest prices were finalized on November 1 st at $4.22/bu. for corn and $10.35/bu. for
soybeans.

One simple method to estimate potential crop insurance payments is to calculate the estimated 2025 “threshold
yield” for crop insurance payments to begin for corn and soybeans with Revenue Protection (RP) crop insurance
policies. If the final farm yield is lower than the “threshold yield”, there is potential for 2025 crop insurance
indemnity payments, depending on the final harvest price for corn or soybeans. Following is the formula to
calculate the “threshold yield” for potential gross insurance indemnity payment:
 Multiply the APH yield on a farm unit times the crop insurance spring price times the crop insurance
coverage level to get the crop insurance guarantee. (The spring prices were $4.70 per bushel for corn
and $10.54 per bushel for soybeans.)
 Divide crop insurance guarantee by the estimated fall harvest price to arrive at the “threshold yield”
where RP crop insurance payments are initiated.
 The estimated payment equals the “threshold yield minus the actual 2025 yield times the harvest price.
(The final harvest prices are $4.22/bu. for corn and $10.35/Bu. for soybeans.)
 Sample calculations for corn and soybeans ……
Corn (85% RP Policy; 200 APH; 175 bu./A farm yield; projected harvest price of $4.22/bu.)
200 bu./A APH x $4.70/bu. x .85 = $799.00 guarantee divided by $4.22/bu. = 189.3 bu./A. “threshold yield”.
189.3 bu./A. – 175 bu./A = 14.3 bu./A x $4.21/bu. = $60.35/A. est. insurance indemnity payment.
Soybeans (85% RP Policy; 60 APH; 45 bu./A farm yield; projected harvest price of $10.35/bu.)
60 bu./A APH x $10.54/bu. x .85 = $537.54 guarantee divided by $10.35/bu. = 51.9 bu./A. “threshold yield”.
51.9 bu./A. – 45 bu./A = 6.9 bu./A x $10.35//bu. = $71.42/A. est. crop insurance indemnity payment.
Producers that have potential crop revenue losses in 2025 should contact their crop insurance agent to find out
about documentation requirements for crop losses and to make accurate crop insurance payment estimates.
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For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group
Phone --- (507) 381-7960; E-mail --- [email protected]