In good news for American farmers, Chinese exporters bought 472,000 metric tons of U.S. soybeans, the biggest such sale in months.

USDA's announcement briefly sent soybeans above $12 a bushel on Wednesday morning. Market watchers are closely tracking whether prices can close above the psychologically significant $12 level as crop growers struggle with a tough farm economy.

It’s the largest daily “flash sale” of U.S. soybeans since January, according to StoneX.

China typically uses the bulk of its imported soybeans for crushing into meal for livestock feed and oil for cooking. Its latest purchase is a sign of diplomatic good will, given that the U.S. crop is currently 60 cents a bushel higher than Brazilian soybeans shipped to Chinese ports, StoneX Group Chief Commodities Economist Arlan Suderman tells Agri-Pulse.

“China made a political rather than economical decision to buy U.S. soybeans,” Suderman said. “So, the buyers would be state buyers who are immune from the tariffs, but who are following orders to buy the higher priced commodities for political reasons.”

Suderman said the expectation is that Washington will remove a fentanyl tariff against Beijing and China in turn will drop a 10% base tariff on U.S. soybeans and other farm products. While the U.S. hasn’t confirmed that, a recent report in Chinese media says the joint “Board of Trade” announced by the U.S. and China in May is making progress toward the goal of removing the tariffs, according to Suderman.

U.S. Deputy Agriculture Secretary Stephen Vaden said last month that China, the world’s biggest ag importer, is on track to live up to an agreement to buy 25 million metric tons of U.S. soybeans this year and next. The Asian nation also met an earlier pledge announced by the Trump administration last October to import 12 million tons of U.S. soybeans, according to USDA.

That’s on top of $17 billion in U.S. ag purchases that China agreed to make on a yearly basis through 2028, according to the White House.

Farmers are struggling with crop prices that aren’t offsetting a spike in costs for key farming tools, especially fertilizer and fuel due to war-driven blockages in the Strait of Hormuz, a critical global trade chokepoint in the Middle East. 

There’s been relief in the last few weeks as a tentative peace deal between the U.S. and Iran reopened the strait to some vessel traffic, though that truce broke last night after Iran began shooting rockets at ships, according to President Donald Trump.

In response, the U.S. struck Iran “very hard last night” and “very probably” will strike them again tonight, Trump said Wednesday at a NATO summit in Turkey. Oil prices shot up more than 7% as of late morning.

 ~Olivia M. Bridges contributed to this report.