This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.

Soybeans have been leading the ag markets higher on a dry stretch of weather in South America and optimism about the upcoming meeting between President Trump and Chinese President Xi Jinping next week. Current planting progress in Brazil is estimated at 35 percent, which is right in line with the historical average pace. The forecast shows a dry stretch coming, but the models indicate that it will be short-lived. There is still a great deal of uncertainty in the longer-term forecasts that show the rain coming back. Brazilian farmers will probably use the break in the rain to kick planting into a higher gear. I think the weather aspect is a minor influence on the market right now. The bigger driver is the upcoming meeting with President Trump and President Xi next Thursday.

To get the party started, China’s top trade negotiator will meet with a group of U.S. officials that will probably include Treasury Secretary Scott Bessent in Malaysia starting today, Friday, Oct. 24. That meeting will lay the groundwork for the meeting between the two leaders. Keeping track of Trump’s thoughts on the meeting is like watching a bouncing ball. At one point this week, he said that he was really looking forward to the meeting and thought we would make great progress, and then finished the statement saying the meeting may not even happen if either of them changes their mind. By the middle of the week, that tone had shifted to be much more optimistic, without the asterisk at the end. On Wednesday, Trump said he would speak with the Chinese president on Russian oil, resuming soybean purchases and rare earth exports.

“We’ll make a deal on, I think, everything,” Trump said. Then on Thursday, the meeting was finally confirmed by the White House. On Thursday, there were also rumors in the market of Chinese traders looking for offers. The hope is that it is in anticipation of some trades that will come soon after the meeting. They have most of their needs covered except for part of December and January but could make some token purchases as a goodwill gesture. The market seems hopeful of that.

Also contributing to the supportive tailwinds on Thursday was the rally in crude, sparked by additional sanctions on Russian oil companies. Trump has also gone back and forth with Putin without having much progress to show. This is his latest attempt to put more pressure on the Russian side. The rally in energies is supportive to corn and soybeans, as they are energy crops almost as much as food crops. Ethanol data was supportive this week as well, with weekly production rebounding significantly and coming close to a record, while ethanol stocks dropped.

Now that the U.S. harvest is winding down, there should not be nearly as much hedge pressure in the market. As long as no headlines pull the rug out from under us — which is more than a little risk — look for the market to try to get back to the upper end of the recent trading range. The results of the meeting with Trump and Xi will set the tone for the market in the near term. The market is hungry for some good news, so even some token purchases may get the market a little excited, but no purchases will probably bring some selling into the markets.