Agricultural Commodities Sector Reacts to Renewed U.S.-China Trade Rhetoric and Corporate Developments

Agricultural Sector Responds to Geopolitical and Corporate Shifts

U.S. agricultural commodities companies Bunge Global SA (BG) and Archer-Daniels-Midland Co. (ADM) observed notable stock movements this week, influenced by former President Trump's re-escalation of trade rhetoric targeting China and significant corporate developments. Bunge Global saw its shares advance by over 12% on Wednesday, October 15, 2025, closing at $92.75. Concurrently, Archer-Daniels-Midland Co. shares also registered a more modest gain of 1.31% on Monday, October 13, 2025, reaching $61.64. These movements underscore the heightened sensitivity of the agricultural sector to both geopolitical tensions and internal corporate strategies.

Trade Policy and Corporate Restructuring Drive Market Activity

The primary catalyst for the surge in agricultural stocks was former President Trump's public statement threatening new trade actions against China. In a post, Trump asserted, "I believe that China purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers, is an Economically Hostile Act. We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution. As an example, we can easily produce Cooking Oil ourselves, we don't need to purchase it from China." This declaration suggests a potential ban on Chinese used cooking oil exports to the U.S., a key ingredient for renewable fuels, which could significantly alter domestic market dynamics.

For Bunge Global, the market reaction was further amplified by its announcement of a business restructuring following the completion of its merger with Viterra Limited in July 2025. The company issued an updated full-year 2025 adjusted earnings per share (EPS) guidance of $7.30 to $7.60. This outlook presented significantly less dilution than anticipated by investors, despite the issuance of approximately 65 million new shares as part of the merger. Analysts, including Morgan Stanley's Stevens Haynes, noted the positive surprise.

"We expect a positive response to Bunge's guidance update for 2025 EPS (including Viterra) of ~$7.30-7.60 (vs. ~$7.75 excluding Viterra) which likely compares favorably to an admittedly wide range of expectations."

Archer-Daniels-Midland Co. also experienced a lift, though its stock had shown recent volatility, declining in six of the past ten trading days. Both Bunge and ADM operate extensive soybean crush plants across the U.S., which produce soybean oil, a direct competitor to imported used cooking oil in biofuel production.

Broader Context: Shifting Global Supply Chains and Economic Implications

The renewed focus on U.S.-China trade relations highlights a persistent shift in global agricultural supply chains. China's soybean imports in September reached near-record levels of 12.87 million metric tons, primarily sourced from South American nations like Brazil and Argentina. This marks a 13.2% increase year-over-year and continues a trend of reduced reliance on U.S. soybeans since trade tensions escalated. Data from Brazil's grain exporter group Anec indicated that China imported 6.5 million tons from Brazil in September alone, representing 93% of Brazil's total soybean exports.

This geopolitical backdrop has already manifested in tangible financial impacts for U.S. agricultural firms. ADM reported a 53% year-over-year drop in Q2 2025 earnings before income taxes, explicitly attributing this to "U.S. trade upheaval" stemming from China's halt on U.S. soybean purchases. While their robust operations in South America have partially offset these losses by pivoting to lower-cost producers for Chinese demand, the domestic impact remains significant.

Conversely, the prospect of U.S. restrictions on Chinese cooking oil imports could benefit domestic producers like Bunge and ADM by reducing competition. In 2024, the U.S. imported nearly $1.2 billion worth of used cooking oil from China. However, these shipments had already dramatically slowed in 2025, with only $356 million imported through the first half of the year, following earlier tariff actions and China's reduction of tax breaks on exports.

Potential Future Implications for the Agricultural Market

The unfolding trade dynamics suggest continued volatility for the agricultural sector. Should the threatened 100% tariffs on Chinese goods, including cooking oil, come to fruition, it could lead to further restructuring of global commodity flows. An economic study commissioned by the American Soybean Association and the National Corn Growers Association projects severe consequences for U.S. farmers under such scenarios. A return to previous tariff levels could see U.S. soybean exports to China decline by 51.8%, or 14-16 million metric tons annually, with corn exports facing an 84.3% reduction. In a more severe scenario with a 60% retaliatory tariff, U.S. soybean exports could drop by over 25 million metric tons, leading to price declines of nearly $1 per bushel for soybeans and $0.13 per bushel for corn. This could result in billions of dollars in annual production value losses for U.S. farmers.

While diplomatic channels remain open, with U.S. Treasury Secretary Scott Bessent confirming expectations for a meeting between Trump and Chinese President Xi Jinping, the current rhetoric underscores the persistent risks. Investors will closely monitor further policy announcements from the U.S. and China, as well as the ongoing adjustment of global sourcing strategies by major agricultural traders. The short-term gains seen in companies like Bunge and ADM in response to potential protectionist measures could be counterbalanced by the broader economic fallout of escalating trade disputes and the long-term reshaping of international commodity markets.