Markets React to Stalled Trade Talks with China and Lower Interest Rates

Markets React to Stalled Trade Talks with China and Lower Interest Rates
Sep 22, 2025
By Farms.com

U.S. China trade deal uncertainty impacts the Commodity Markets

On the weekly Ag Commodity+ Podcast, Farms.com Risk Management Chief Commodity Strategist Moe Agostino and Commodity Strategist Abhinesh Gopal reviewed key market events for the week of September 15 to 19. The focus was on the stalled US - China trade talks, falling interest rates, and updated crop estimates and the impact these events were having on the commodity markets.

Soybeans weakened after discussions between President Trump and Chinese Premier Xi produced no mention of agricultural products. While talks continue, no agreement is expected before early 2026, leaving US soybean growers without fresh Chinese demand this winter.

Economic policy changes also drove market activity. The US Federal Reserve reduced rates for the first time in nine months, with further cuts likely. These moves fueled stock market gains, with major US indexes sharply higher to new record levels. Lower rates may eventually increase commodity investment, though effects will take time.

The Bank of Canada cut rates for the eighth time to 2.5 percent, with more cuts possible by year end.

The team noted a new US framework trade agreement with Taiwan worth $10 billion over four years. While positive, it is not seen as a major shift compared to existing trade volumes.

Statistics Canada raised production estimates for canola and wheat, with canola possibly reaching 21 million metric tons by December.

Meanwhile, drought continues to stress US Midwest and Ontario crops, while South America expects favorable rains for soybean planting.

In livestock, the USDA’s latest Cattle on Feed report showed tight supplies.

Butter futures fell to their lowest level in nearly three years due to strong seasonal production.

Agostino and Gopal emphasized that farmers must stay alert to these changing trade, weather, and market conditions to protect profits and plan harvest strategies.

For daily information and updates on agriculture commodity marketing and price risk management for North American farmers, producers, and agribusiness visit things; Farms.com Risk Management Website to subscribe to the program.

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