Trump plans aid package for US soybean farmers while seeking trade deal with China

Trump plans aid package for US soybean farmers while seeking trade deal with China

President Trump is considering a new aid package worth between $10 billion and $14 billion to support U.S. farmers hurt by his tariff policies, according to a report from The Wall Street Journal . The plan, still under discussion, could use revenue collected from tariffs, with payments potentially starting in the coming months. Soybean growers, who have been among the hardest hit, would likely receive much of the support.

The president also indicated he would press Chinese leader Xi Jinping to resume buying U.S. soybeans during their upcoming meeting in South Korea. Any breakthrough with China could affect the administration’s decision on aid, the Journal reported, citing U.S. officials. Farmers face mounting pressure as bumper harvests have created surpluses, driving down crop prices. Costs for equipment and fertilizer continue to climb, and U.S. soybean exports to China have dropped sharply. Only 200 million bushels were shipped this year through August, compared with nearly one billion in the same period last year. Brazil, meanwhile, has seized much of the Chinese market.

Soybean futures have been volatile in recent days, with the market reacting to Trump's statements. On Wednesday, soybeans for November delivery settled +1.3% to $10.15 1/4 per bushel after rising as much as 1.9% during the day . The U.S. Department of Agriculture (USDA) is not expected to release new data or reports while the government shutdown is active, meaning that until the shutdown ends, the last USDA data the market has is a stock report showing larger than expected supplies of grains.

The USDA data indicates that China, the world's top soybean buyer, has not booked any cargoes as of September 18, weeks into the new marketing season. Last year, the U.S. comprised 20% of China's soybean imports, worth more than $12 billion, and accounting for more than half of total U.S. soy export value.

Trump has come under pressure from Republican lawmakers from the agricultural heartland to break the impasse with China over soybean purchases, which has squeezed farmers. Lawmakers from farm states have urged the administration to provide support for a range of crops while also opening new export markets. Agriculture Secretary Brooke Rollins has been traveling abroad to secure alternative buyers, as China’s long-term investments in South America threaten U.S. market share.

Soybean futures hover around $10 per bushel, but farmers in some northern states are seeing closer to $8. The U.S. has collected a record $149 billion in tariffs so far this year, much of it from duties Trump imposed on China.