When it comes to the grain market, the big factor this week continues to be China.

“The trade has been disappointed with the amount of soybeans China has bought from the United States,” says Brian Hoops of Midwest Market Solutions, Inc., in Springfield, Missouri.

When the Trump administration and the Chinese leadership announced a 90-day truce in their trade war a few weeks ago, it was accompanied by the promise that China would buy a significant amount of U.S. agricultural products as a show of good faith. The trade expected about 5 million metric tons of soybeans to be sold to China.

Instead, only a bit more than 1.5 million metric tons in soybean sales to China had been announced as of early this week.

“That is less than half of what was expected,” Hoops says.

The clock is ticking on any sales to China, he adds. First of all, if no agreement is reached by March, the trade war will escalate with increased tariffs by both parties. Second, Chinese buyers traditionally switch their attention and their purchases to South American soybean once that crop begins to come to market in February and March.

Those two items mean that any sales need to be announced soon and shipments made — more than announcements of intentions to buy, Hoops says.

And for all the implications of tax changes or USDA payment deadlines, the Chinese trade situation is clearly the elephant in the room when it comes to grain prices right now.

For farmers, all of this means that marketing strategies aimed at locking in prices or locking in basis make sense right now. Storing unsold grain in the hope of finding a better price later in the marketing year is a very risky strategy, Hoops says.

Meanwhile, the market will continue to watch the China trade situation and will also start paying close attention to weather and crop conditions in South America in the coming several months.

Farmers can do little about either of those factors other than to recognize them in their market plans and work to reduce risk through the use of market tools, he says.

Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.