Grain and hog futures were sharply higher on May 18 as the White House released new details about the China trade framework. Cattle markets were mixed, with live cattle futures showing higher weekly closes following record cash trades.
The announcement is significant for U.S. agriculture, as it outlines China’s commitment to purchase $17 billion in agricultural products for 2027 and 2028, with $8 billion planned for 2026. This comes in addition to previous commitments by China to buy 25 million metric tons of soybeans made in October of the prior year.
Brad Koomia of Kooima Kooima Varilek said that while the $17 billion figure was not specific about which commodities would be included, he expects soybeans, feed grains, and beef are likely candidates. He added that pork purchases may be less likely due to China’s expanding hog herd after African Swine Fever: “My reasoning is based on the idea that they haven’t bought pork for years already. Plus, the China hog herd has expanded after being decimated by African Swine Fever. What they do need is feed,” he said.
China also re-listed 425 U.S. beef plants for export after concerns over ractopamine in U.S. beef but focused mostly on variety meats rather than muscle cuts. “We’re talking about stuff that a lot of us don’t eat anymore. Tongues, brains, offal product… So maybe we can get a little bit of that,” Koomia said.
Koomia questioned whether China would follow through with its purchase commitments: “China’s not reliable… The worry is… they continue to posture and they don’t live up to what they say they’re going to do.” Another unresolved issue is whether China will drop its current ten percent tariff on U.S. soybeans; President Trump said tariffs were not discussed while Chinese officials mentioned an agreement without specifics.
In cattle markets, despite strong cash prices—reaching around $265—futures have lagged behind or shown discounts compared to cash prices. According to Koomia: “I feel like the signal that we’re nearing the end of this thing is the change in basis… where cash much outperforms futures and that’s happened.” He noted some market irregularities such as no premium between Choice boxes and Select grades—a seasonal anomaly raising demand concerns.
Funds have been liquidating positions in cattle futures due to fears over increased beef imports and possible policy changes affecting domestic supply chains. Additional factors include CME raising cattle futures limits—which increases volatility—and anticipation surrounding Friday’s Cattle on Feed report expected to show higher placements compared with last year due partly to border closures.
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Looking ahead, grain prices remain sensitive both to ongoing trade negotiations with China and broader geopolitical tensions such as war rhetoric involving Iran—which has led energy markets higher amid inflationary pressures.
