Frayne Olson, North Dakota State University Extension grain marketing specialist, shared 5 expectations he has for the soybean market and the U.S.-China trade war in the coming months:

1. The U.S. may sign some type of trade agreement with China in early May, with China getting back into the market in late June or July.

2. China and the U.S. may eliminate or reduce tariffs. However, the two countries could reinstate or raise the tariffs if progress isn’t made on disputed issues.

3. The agreement may call for China to not only buy more soybeans, but also more of other commodities, too, such as corn, rice, sorghum, DDGs and dairy. This may dilute the agreement’s impact on the soybean market.

4. The trade deal may require China to spend an additional amount of money on U.S. ag products, rather than buy a specific number of additional bushels. If the deal is based on dollars rather than bushels, Chinese traders will have more incentive to hold down prices. As a result, China will likely just “nibble around the edges” of the U.S. grain supply and only buy small amounts sporadically. Chinese traders won’t want to cause a big rally in U.S. corn or soybean prices.

5. The odds of a significant price rally in soybeans are relatively low, even if the U.S.-China trade war ends.

If we do get some price rallies in the summer, they will likely only be moderate because the U.S. has large grain inventories, Olson says.

Also, China hasn’t traditionally bought many soybeans from the U.S. in the summer. It sources soybeans out of South America during that period.

Olson’s soybean periodic market reports are sponsored by the North Dakota Soybean. You can listen to the latest installment online.