China's Soybean Buying Spree Ignites Commodity Rally: January Contracts Surge as USDA Confirms Major Export Sale

The soybean complex experienced a significant rally this week following confirmation of a substantial export deal with China, signaling renewed appetite for U.S. agricultural commodities. The momentum extends beyond soybeans themselves, with implications for broad commodity-linked ETF strategies, particularly those tracking agricultural and China ETF exposure.

The China Factor: A Turning Point for Bean Exports

In a pivotal development, the USDA disclosed a private export sale of 312,000 metric tons of soybeans destined for China—a move that marks a strategic shift in the world’s largest soy consumer’s purchasing patterns. This transaction represents the first meaningful Chinese purchase in recent weeks and underscores the critical importance of Beijing’s demand in shaping global commodity prices.

The timing of this announcement provided the catalyst for Friday’s rally, with January soybean futures ascending 12¾ cents for the week. Current-month contracts climbed 4 to 6¼ cents, while the cash market reflected similar strength, with cmdtyView’s national average advancing 6½ cents to settle at $10.65½ per bushel.

Contract-by-Contract Performance Across the Complex

The broader soybean complex participated in the upside move, though with varying degrees of enthusiasm. January soybeans closed at $11.37¾, up 6¼ cents, while March and May contracts also posted gains of 5¼ and 4¾ cents respectively. The recent strength contrasts sharply with earlier concerns about weakening export demand.

Soybean meal futures, however, retreated $1.70 to settle at $3.60, with December sinking an additional 70 cents. Bean oil told a different story, rallying 87 to 110 points, with December futures surging 150 points as crush spreads attracted renewed interest. November saw 199 delivery notices issued against the December soybean meal contract, alongside 447 for bean oil, suggesting active cash settlement activity.

Broader Export Context: Weekly Sales Remain Challenged

The USDA’s export sales report for the week ending October 16 showed 1.1 million metric tons of soybean sales—precisely at the midpoint of trader expectations ranging from 0.6 to 2.0 MMT. While this marked the first week to exceed the 1 MMT threshold for the 2025/26 marketing year, the figure stood 41.2% above the prior week yet languished 56.9% below year-ago levels. The China purchase represents progress in a challenging export environment.

Soybean meal transactions totaled 543,119 MT, showing week-over-week improvement, while bean oil sales reached 19,133 MT. Incoming data for the week ending October 23, due Monday, will provide the next reading on export momentum, with analysts modeling 0.6 to 1.6 MMT of beans, 50,000 to 500,000 MT of meal, and 5,000 to 25,000 MT of oil.

Global Supply Dynamics: Brazilian Production Outlook

On the supply front, Agroconsult pegged Brazil’s 2025/26 soybean harvest at 178.1 MMT, representing a 6 MMT increase from the prior year—a bullish backdrop for global price formation and Chinese purchasing power throughout the season.

The convergence of Chinese buying interest, firm U.S. export pricing, and supportive South American supply projections suggests that commodity investors tracking agricultural exposure—whether through direct futures or broader commodity and China ETF vehicles—should monitor this developing trend closely.