OMAHA (DTN) -- With farmers facing projected financial losses in the crop sector, economists and analysts are both waiting for signals about new soybean sales to China and the federal government to reopen to see what kind of aid develops.

Some positive signs over sales to China began to emerge late this week, especially as a key Chinese official spoke at an expo in Shanghai.

Chen Chao, director general of the Department of American and Oceanic Affairs at the Chinese Ministry of Commerce, was quoted in the South China Post from a speech given at the Chinese International Import Expo on Thursday. With adjusted tariffs, China will encourage companies to import agricultural products from the U.S. "in line with market principles," he said. "As long as the price is competitive, the quality is good and supply is sufficient, I believe Chinese companies will reach many deals or sign intentions with U.S. exporters and farmers," Chen said. He also noted that China has a "massive" need for soybeans.

A delegation from the U.S. Soybean Export Council also attended the expo, holding meetings with buyers and Chinese officials.

Reuters followed up with a report that China also had restored soybean import licenses for Minnesota-based farmers' cooperative CHS Inc., Louis Dreyfus Company Grains Merchandising LLC, and EGT LLC, a joint venture between Bunge and Pan Ocean America. Those export licenses had been suspended in early March, just as China launched retaliatory tariffs against the U.S.

President Donald Trump and his administration have said China is expected to buy 12 million metric tons (mmt), or 440 million bushels (mb), of U.S. soybeans between now and January, then buy 25 mmt (919 mb) annually through 2028.

LOOKING FOR SIGNS WITHOUT USDA REPORTS

Soybean traders remain focused on whether China will begin new purchases following recent diplomatic statements, but the lack of Foreign Agricultural Service (FAS) export data remains a challenge for market observers.

When it comes to the terms with China, do Chinese buyers just need to commit to purchase or quickly line up ships to move for that first tranche of 440 mb of soybeans?

"Nothing said it had to be shipped," said John Newton, vice president of public policy and economic analysis at the American Farm Bureau Federation. "If they make commitments to buy it and ship in January or February, does that work? How do you define 'buy' 12 million metric tons?"

Newton pointed out that in past years, the U.S. has shipped as much a 12 mmt during November and December, but those shipments were also lined up logistically from earlier commitments.

The tariff on U.S. soybeans also could remain a problem. So far, China has cut the tariff on U.S. soybeans from 20% to 10%, but that still makes U.S. soybeans more expensive than buying from Brazil. The U.S. was selling soybeans at about $400 a metric ton compared to $430 or higher from Brazil. Since Trump returned from China, U.S. prices have moved upward as well, said Scott Gerlt, chief economist at the American Soybean Association.

"The kicker is there is still a 10% additional tariff on U.S. soybeans, so by the time you pay the tariff, Brazil is still the better deal," Gerlt said.

On Thursday, U.S. soybeans in the Gulf were priced at $445 a ton, while Brazil soybeans were $443 a ton, according to International Grains Council data.

Brazil, however, is running short on supplies, which could tighten its export availability and provide the opportunity U.S. sellers need right now. Brazil just sold 10 cargoes of soybeans -- roughly 650,000 metric tons -- but was already projected to see stocks fall as low as 3.8 mmt (139.6 mb) before that sale.

"It looks like Brazil is getting pretty low on exportable product unless they really pull back on domestic crush," Gerlt said. "They can't sell too much more of their current crop."

He noted that while U.S. soybean prices have strengthened, the Phase I trade agreement allowed China to limit purchases if U.S. beans were priced above Brazil's.

"There was really an out from those purchase levels because China would have had to pay a premium to buy from the U.S., which Phase I didn't require," Gerlt said. "It's a very positive development, but there's still a lot we don't know, and we're waiting on details."

That may relate back to Chen's comment in Shanghai to buy "in line with market principles."

WATCHING BASIS IN THE PACIFIC NORTHWEST

DTN Basis Analyst Mary Kennedy said basis levels in the PNW have improved dramatically since the end of September. After it was reported that COFCO had bought three cargoes of soybeans on Oct. 29, the PNW basis surged by 74 cents. But after no more sales were announced, the December PNW basis was down 10 cents as of Thursday.

"That means whoever did the business was likely getting close to covered," Kennedy said.

Since there is no weekly export sales report due to the shutdown, the only evidence of soybean sales will be in the weekly inspections report after vessels are loaded and graded for export, Kennedy said.

"The bottom line is that if China doesn't pick up soybean purchases, the PNW basis will likely fade even more after January 2026, in my opinion," Kennedy said. "It is still possible that China may buy more U.S. soybeans for January 2026, but it's a wait-and-see scenario right now."

GOVERNMENT AID STILL EXPECTED

Talk about a $12 billion to $13 billion aid package continues, though there are a lot of questions about what an aid package might look like.

Sen. John Boozman, R-Ark., chairman of the Senate Agriculture Committee, told DTN Political Correspondent Jerry Hagstrom this week that he believes American farmers will still need emergency aid this fall and USDA should take the lead on that aid.

The website Government Executive first reported USDA moved $13 billion from the Commodity Credit Corp. (CCC) to a separate fund for farmer aid before the official government shutdown occurred.

Politico reported that Sen. John Hoeven, R-N.D., said a payment program similar to the 2018-19 Market Facilitation Program (MFP) is "all teed up."

Right now, the department cannot act until the federal shutdown ends.

"USDA has said that they have $12 billion and that they can't do anything until the government shutdown is over," Newton said.

At this stage, Newton said, neither USDA nor the White House has outlined what shape an aid package might take. The MFP changed its payment formula from 2018 to 2019, for instance. He cautioned that speculation is running ahead of details and premature announcements also could distort markets. There is already chatter that payments could increase fertilizer prices by boosting demand, Newton noted.

"So, I think there's a vacuum that people are filling with different concepts and ideas and looking at how we did MFP 1 and how we did MFP 2," Newton added. "There are some sensitivities right now over announcing too many details and potentially distorting market signals," he said.

USDA developed the $10 billion Emergency Commodity Assistance Program (ECAP) earlier this year based on a flat-rate payment tied to a farmer's 2024 planted acres. That formula was prescribed by Congress when they funded the program to deal with 2024 crop losses.

RECENT FARM INCOME REPORTS HIGHLIGHT CROP CHALLENGES

The University of Missouri's Rural and Farm Policy Analysis Center (RaFPAC) has released a report projecting higher net farm income in 2025 -- mainly due to a strong livestock sector and $35.3 billion in supplemental and ad-hoc disaster assistance already added to the budgets.

Along with ECAP, Congress also provided nearly $21 billion in natural disaster aid that was still being distributed when the government shut down.

"Trying to protect the cash flow of every operation is crucial at this point in time," said Alejandro Plastina, an economist with RaFPAC.

Brad Lubben, Extension policy specialist at the University of Nebraska-Lincoln, said state projections highlight how crops and livestock are headed in opposite directions financially. "It's a tale of two sectors," Lubben said.

Economists agreed that while 2025 farm income may look strong on paper, much depends on how quickly trade resumes and whether new aid becomes available once the government reopens.

"Projected government payments are a very big part of the picture for 2025," Lubben said. "We're dealing with receipts and challenges to cash flow. There may, in fact, be billions of dollars in trade assistance announced soon, but we don't know yet."

Also see "Technically Speaking, Soybeans: a House of Cards?" here: https://www.dtnpf.com/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

(c) Copyright 2025 DTN, LLC. All rights reserved.