China has resumed purchases of Canadian canola in the last two weeks after a months-long hiatus triggered by a trade war.

Rival exporter Australia has been positioning itself to capture a share of the Chinese market, having sold around 500,000 metric tons to Chinese buyers after overcoming biosecurity hurdles that had previously blocked its access.

“Even if they do keep buying Canadian canola, China is now buying our canola for the first time in five years,” said Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney.

WHY IT MATTERS: Australia has been positioning itself to capture a share of China’s canola market while Canadian canola was shut out due to trade disputes.

“Being back in China, even if not exclusively, is a good thing for Australian canola demand and prices,” he said.

Chinese buyers have snapped up as much as 650,000 tons of Canadian seed since Beijing and Ottawa struck an initial trade deal earlier this month that will slash tariffs on Chinese electric vehicles and Canadian canola, traders have told Reuters.

China imposed preliminary anti-dumping duties of 75.8 per cent on Canadian canola in August, largely halting shipments and idling its crushing industry. This month’s deal should drop total duties on canola to around 15 per cent.

Canadian and Australian prices will now influence trading decisions, dealers said.

“Prices hold the key,” said Stefan Meyer, who leads a trading team at brokers StoneX in Sydney.

There was little difference between the landed cost of Australian and Canadian canola in China, he said. “Australian exporters are matching the (Canadian) prices or offering slightly lower.”

Canada likely to retake lion’s share of China market

Canadian canola seed is being offered in China at $551 (C$745) a ton for March shipment, including cost and freight (C&F), compared with $550 a ton for Australian canola, two trade sources said. A third said Australian supply was $5-$10 cheaper than Canadian.

Canada, which grows much more canola than Australia, will likely retake the biggest share of China’s market, traders said.

“Domestic companies remain more inclined to purchase Canadian canola, having relied on it for years due to its large production and steady supply,” said Zhang Deqiang, an analyst at Sublime China Information.

But Australian exporters remain upbeat.

“We can compete on price for the volume and we would win demand if competitive,” said a source at an international trading firm in Australia.

This is “a significant improvement from not having any access to the market at all,” he said.

The first few Australian shipments are part of a trial to prove that seed from the country does not risk spreading a fungal plant disease called blackleg in China.

Two cargoes of about 60,000 tons have arrived so far from Australia. One, which arrived in China in January, is set to be crushed this week, according to traders with knowledge of the matter.

At least two more are due to sail in February, according to shipping data compiled by Bendigo Bank Agribusiness.

— Additional reporting and editing by Naveen Thukral

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Brazil was already the biggest beef exporter, shipping meat worth almost $17 billion (C$23.5 billion) in 2025, according to government trade data released on Tuesday. Beef production numbers are not due until February, but analysts have recently raised their estimates. Farmers have been sending more animals to slaughter, cashing in on high export demand from countries including China and the U.S., where low supply has pushed beef prices to record levels.

Production out-performs forecasts

Elevated slaughter typically leads to a period of low output as producers hold back animals to breed and rebuild herds. But productivity gains in Brazil may limit or even prevent a downturn, people in the industry say. They noted that farms have been inseminating cattle quicker, fattening them faster and slaughtering them younger.

“Ten years ago, the average age of cattle slaughtered in Brazil was five years,” said Vinicius Barbosa, a commercial manager responsible for tens of thousands of cattle at the CMA feedlot in Barretos, about 260 miles (420 km) north of Sao Paulo. “Now it is 36 months and going rapidly to 24,” he said.

Mauricio Nogueira, head of livestock consultancy Athenagro, said Brazilian beef production far surpassed his forecast in 2025. Output grew 4 per cent for the year, where he had predicted a 2.7 per cent drop. The increase of around 800,000 tons was about equal to total annual exports of Argentina, the world’s No. 5 beef shipper.

Rabobank, which had expected Brazil’s beef production to decline in 2025, now sees 0.5 per cent growth to 12.5 million tons carcass weight equivalent. The U.S. Department of Agriculture in December raised its estimate for Brazilian beef output by 450,000 tons to 12.35 million tons.

If the official numbers confirm market estimates, 2025 will be the first year that Brazil’s output will have surpassed U.S. production, which fell 3.9 per cent to 11.8 million tons in 2025, according to USDA estimates, following years of drought.

Feedlots, rising carcass weight drive output

U.S. beef production will fall a further 0.9 per cent to 11.7 million tons in 2026, the USDA said. In Brazil, the USDA and Rabobank project a decline in output, but Nogueira said rising productivity could actually boost Brazil’s production by around 300,000 tons.

Almost 28 per cent of cattle slaughtered in Brazil will be fattened in feedlots by 2027, up from 22 per cent in 2025, according to consultants Scot Consultoria.

“Feedlots do in 100 days for cattle what pasture does in between 18 and 24 months,” said Barbosa, adding that CMA’s Barretos feedlot would process 80,000 cattle in 2026, up from 65,000 last year.

Brazil’s booming corn ethanol industry is generating a byproduct known as dried distillers grains that has higher protein than corn and helps cattle fatten faster, analysts said.

Cows are becoming pregnant more often as farmers adopt more efficient insemination techniques, allowing producers to slaughter more animals without reducing herd size.

Scot Consultoria expects Brazil’s pregnancy rate – the proportion of females that become pregnant during a breeding season – to rise to 54 per cent in 2027 from an expected 50 per cent in 2026.

Better genetics are also improving cattle growth and boosting meat quality, analysts say. And Brazil still has not matched the 90 per cent proportion of cattle passing through feedlots as in the U.S., or Australia’s 40 per cent.

If Brazil’s pregnancy rate rose to 66 per cent, equivalent to neighbouring Argentina, the number of calves birthed each year would rise from an estimated 32 million to 40 million, according to consultants Datagro. The pregnancy rate in Canada is 96 per cent, they said.

Government data show Brazil has 238 million cattle, well over double the 94 million in the U.S. Higher productivity would allow output to expand without increasing cattle numbers or the area of pasture land. That could ease one economic driver of deforestation of the Amazon rainforest.

Brazil’s cattle herd is expected to grow just four per cent between 2024 and 2034 while beef production increases 24 per cent, according to Brazilian beef exporter group ABIEC. U.S. beef production will rise 3.5 per cent and cattle numbers will grow five per cent over that period, by USDA estimates.

Brazil key as top producers scale back

Global beef prices will hinge on whether Brazil can avoid a production downturn this year.

The USDA expects output in the world’s six biggest producers to fall in 2026 by a combined 2.4 per cent – the biggest annual drop in decades – after rising 0.4 per cent in 2025. These producers are Brazil, the U.S., China, the European Union, Argentina and Australia. The list excludes India, which the USDA names as one of the six top beef producers even though that country produces buffalo meat rather than beef.

The USDA expects Brazilian production to fall 5.3 per cent to 11.7 million tons carcass weight equivalent this year. If Nogueira’s estimates are confirmed and output rises instead to around 12.6 million tons, the decline in the top six producers would be just 0.2 per cent.

“There has never been so much international demand for Brazilian beef,” said Guilherme Jank, a Datagro analyst, adding that local beef packers have also ramped up capacity.

“We are witnessing firsthand a significant shift in how the beef cattle supply system works in Brazil, in terms of quality, scale, efficiency, and productivity,” he said.

— Additional reporting by Ella Cao in Beijing and Tom Polansek in Chicago

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U.S. shipments to China, worth around $120 million a month (C$167.1 million), collapsed after Beijing in March allowed permits to expire at hundreds of American meat facilities and as Trump unleashed a tit-for-tat tariff war.

Other U.S. farm exports to China, the world’s biggest food importer, have also suffered since Trump retook power. On soybeans alone, U.S. farmers have lost out on shipments worth billions of dollars during the current harvest season.

U.S. beef exports have in general declined in recent years as drought shrank the country’s cattle herd, reducing production and pushing prices to record highs. But the drop in trade with China has been far more sudden and extreme.

Australian beef steps in

The value of U.S. beef sent to China fell to just $8.1 million in July and $9.5 million in August, Chinese trade data showed, compared to $118 million and $125 million in the same months a year earlier.

Australia has mopped up. Its beef shipments to China shot from $140 million a month in the two years to March to $221 million in July and $226 million in August.

In total, over the five months from April through August, U.S. beef exports to China were worth $388 million less than if trade had remained at the average level of the previous two years. Australian shipments were worth $313 million more.

Brazil, China’s largest beef supplier, has also stepped up exports in recent months, but Australia has benefited most because its grain-fed beef is the closest equivalent to U.S. products.

“It’s good for Australia,” said Matt Dalgleish, a meat and livestock analyst at Australian consultants Episode 3. “It’s underpinning really strong prices for cattle.”

U.S. meat group hopes for talks to progress

Trade negotiations between Beijing and Washington could end the lock-out, said U.S. Meat Export Federation spokesperson Joe Schuele.

“The beef impasse with China has very little to do with beef,” he said. “It’s entangled in other issues between the U.S. and China. If they can make progress on those issues, we see more hope for getting this resolved.”

U.S. beef shipments to China surged in 2020 and 2021 after Trump, in his first term, struck a trade deal with Beijing.

China plays a useful role for U.S. beef processors by paying premium prices for cuts like chuck rolls that are less popular in the United States.

“We still need to export the cuts that do not attract a lot of attention in the domestic market,” Schuele said. “We’re losing out on the upward pressure of the Chinese bids.”

Even with a trade agreement, the U.S. would struggle to take back market share for several years, said Dalgleish.

Australia’s beef production has reached all-time highs, and its meat is far cheaper – so much so that Australia is not only shipping more to China but exporting record quantities to the United States.

“The U.S. isn’t really in a position to be competitive,” said Dalgleish.

Meanwhile, looming over all beef suppliers to China is an investigation by Beijing into imports that could result in curbs on trade to deal with a beef supply glut inside China. The investigation is due to run until November 26.

— Reporting by Peter Hobson in Canberra and Tom Polansek in Chicago.

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The purchases amount to around 540,000 tonnes, equivalent to about eight per cent of China’s total canola imports last year.

Beijing is conducting an anti-dumping probe into Canadian canola, and in August imposed preliminary duties of 75.8 per cent, bringing shipments to a virtual standstill amid a larger diplomatic and trade dispute between the two nations.

Canada had been China’s main supplier for the past several years, and the cargoes demonstrate China can find alternate sources of the oilseed as trade talks between Ottawa and Beijing drag on. Australia is a smaller producer than Canada, however, and may struggle to match the Canadian volumes.

All shipments are scheduled to load between November and January, said an Australia-based broker for agricultural products with direct knowledge of the deals. The nine cargoes include one that was reported by Reuters last month.

“It has been a typical buying operation by a Chinese company,” said the Australia-based broker. “They just went in quietly and bought nine cargoes from several major trading companies in Australia.”

COFCO did not immediately respond to a request for comment.

Australia had been frozen out of the Chinese market by biosecurity rules to prevent the spread of a fungal plant disease since 2020, but Reuters reported in July that Canberra was close to an agreement with Beijing that would allow for five trial cargoes.

Canola, or rapeseed, is crushed to produce cooking oil and other products. The meal left behind in the crushing process is used as livestock feed.

China is the world’s biggest canola importer, taking in 6.4 million tonnes worth US$3.4 billion last year, almost all of it from Canada, according to Chinese customs data.

Canada is the world’s biggest exporter of canola and Australia is the second-biggest.

Earlier this month, China extended its investigation into Canadian canola imports to March 9, 2026, buying six more months for negotiations. A final ruling could maintain the duty rate, change it or remove it.

The post China snaps up Australian canola after trade spat with Canada, sources say appeared first on Country Guide.

The Liebeck farm, 300 kilometers from Perth in Western Australia, gets half the rain of the wheatbelts of central Kansas or northern France. Growing-season rainfall across the state’s crop lands has declined by about one-fifth over three decades.

That should make farming harder. But Liebeck’s wheat yield has doubled since 2015.

Liebeck, 32, is part of a revolution in farm management that has enabled Australia to produce around 15 million metric tons more wheat annually than in the 1980s, despite hotter, drier conditions. The increase is equivalent to around 7 per cent of all wheat shipped around the planet each year.

Australia’s gains in wheat farm productivity have exceeded those in the United States, Canada and Europe, according to U.S. Department of Agriculture data, and continue to rise while those of other developed markets slow or reverse.

The ability of Australia’s farmers to produce more wheat for a growing global population owes largely to a cluster of innovations since the 1980s that changed the seeds farmers plant, how they plant them, and how they cultivate the soil, many growers and researchers say. These advances have been turbocharged by Australia’s system of applied research, and by a relentless quest for efficiency among farmers who receive minimal subsidies.

This account of how Australia’s wheat growers defied the climate odds is based on interviews with more than 20 farmers and researchers, a review of more than a dozen academic papers and an examination of decades of farm and weather data. Reuters visited four farms, a seed-breeding company and two government research facilities.

Australia isn’t the biggest wheat producer, and its fields aren’t the most fruitful. But it is important for two reasons. Its modest population means its additional production feeds other countries. And it is the driest inhabited continent, where increasing climate volatility might have rendered some agriculture unviable. Yet it is among the world’s top wheat exporters.

Australia’s success has influenced research in other nations that have dry crop lands, including the U.S. and Canada, five scientists told Reuters. Some Australian practices, to be sure, such as soil re-engineering, haven’t been replicated as widely, sometimes because ground conditions are less suitable. But the country’s focus on closing the gap between theoretical maximum crop yields and real-world outcomes has spurred global efforts to improve productivity over the past 15 years, coinciding with intensifying climate change.

Liebeck’s farm in 2023 received its lowest rainfall in half a century, yet it produced 1 ton of wheat per hectare (2.47 acres) — to the amazement of his 66-year-old father, Ken.

“I asked dad what it would have been like in his day and he said, ‘Absolute disaster,’” Liebeck said.

The elder Liebeck told Reuters he would have produced just 400 kg a hectare in such conditions around the turn of the millennium.

Soil like beach sand

Farming in Australia has always been precarious. The weather swings between drought, heat, fire and flood. The soil is short of nutrients.

Western Australia, the top wheat-exporting region, has seen the biggest decline in average rainfall of Australia’s cropping areas over the past three decades, official weather data show. Rainfall patterns have shifted, with more falling in summer, when fields are fallow, and less in winter, when crops are growing.

The state also has some of the poorest soils.

“Imagine beach sand,” said Tress Walmsley, CEO of Perth-based seed-breeding company InterGrain, which develops wheat varieties that can better cope with Australian conditions. “These soils are nutrient-depleted, often toxic and water-repellent. And at the end of each season, the crop runs out of water.”

Thirst for water provided the spark for many of the changes in Australian agriculture. In 1984, scientists Reg French and Jeff Schultz calculated that in optimum conditions, after evaporation, Australia’s farmers should be able to produce 20 kilograms of wheat per hectare for every millimeter of rain during the April-to-October growing season — about four times what they were achieving.

The discovery allowed producers to plot on a graph what they had grown and what they might have grown, said John Kirkegaard, a plant scientist at the Commonwealth Scientific and Industrial Research Organisation (CSIRO), the Australian government’s national science agency. This turned the focus of growers and researchers to closing the yield gap, and they began benchmarking water-use efficiency to extract more crop per drop.

Switching to no-till

A key step was switching to no-till agriculture. Constant plowing to control weeds damaged soil and exposed it to evaporation, reducing the amount of water stored for crops.

No-till methods, using herbicides instead of plowing, grew out of 1930s dust-bowl America. Australian adoption jumped from roughly five per cent in the early 1980s to about 80 per cent, according to the Grains Research and Development Corp. In Western Australia, it’s more than 90 per cent.

Canadian adoption of no-till practices sat at 60.9 per cent in 2021, though adoption is greater than 67 per cent in much of Saskatchewan and Alberta according to that year’s census of agriculture.

One drawback was that over time, farm equipment driven over untilled fields compacted the deeper levels of the soil, hindering water infiltration and root growth. To address that, Australian farmers began to restructure soils, spreading lime to reduce acidity, then employing other kinds of heavy machinery.

Liebeck points to his deep ripper, a massive, bright-orange steel frame with 10 metal claws that tear through the soil at up to 84 centimeters deep. It generates such resistance that his 540-horsepower tractor can haul it only at walking pace.

The ripper, and another device called a spader, a rotating cylinder with protruding shovel heads, break up compacted layers of earth. While plowing, ripping and spading are all tillage methods, no-till farming refers to eschewing the traditional practice of plowing to kill weeds and prepare fields for planting each year. Ripping and spading are less-frequent but bolder interventions, often performed at much greater depths. They change the structure and constituents of the soil, churning unproductive layers into a more-absorbent mix that better holds water and nutrients.

Hauling the ripper through a field can improve his wheat yield by between 36 per cent and 50 per cent, Liebeck said. The machine cost A$220,000 (C$197,230). “A bit dear for a glorified shovel,” he said, but it “digs up profit.”

Rippers and spaders are used elsewhere, but rarely as intensively as in Australia, according to farmers and researchers. In wetter areas such as Europe, rippers are harder to pull through heavy soil that is typically plowed.

Two-thirds of Western Australia’s roughly 4,000 growers had deep-ripped, spaded or inverted their soil by 2023, state government-commissioned research found, up from 52 per cent in 2019.

Efforts to improve Australian soil echo practices in Europe and North America to drain land and reclaim it from the sea, said Kirkegaard. “But the sorts of strategies in Australia that are now making previously poor farming land into good farming land are probably unique,” he said.

Other innovations helped growers curb disease. They introduced new crop rotations, including canola and lupins, a legume used for animal feed. Canola area shot from 50,000 hectares in Australia in 1989 to around 3.5 million hectares (8.65 million acres) today, agriculture ministry data shows.

Farmers began sowing two to four weeks earlier, sometimes in dry ground, so plants would flower at optimal times, Kirkegaard said. Sowing now starts around mid-April, giving wheat several months to grow during the southern winter and spring, when water remains available, so that it can mature before the summer heat arrives toward the end of the year.

Productivity takes off

Productivity took off. Western Australian farmers in the early 1980s grew 3.3 kg of wheat per hectare for every millimeter of growing-season rain, a third below the national average, government data show. In 2024, they achieved 9.3 kg per millimeter, just one-fifth shy of the 11.5 kg nationally.

Those improvements helped Australia double its wheat exports in the last four decades to well over 20 million tons a year. Most goes to Southeast Asia and the Middle East, where populations have grown rapidly.

Rising production has kept a lid on prices. A bushel of wheat on the Chicago Board of Trade, the global benchmark, averaged about $3.50 (C$4.82) during the 1980s. The world population has soared by 3.5 billion people since then but a Chicago bushel costs around $5.50 (C$7.57), an increase far below the rate of inflation.

A serious threat to Australian wheat supply would cause prices to rise considerably, said Dennis Voznesenski, an agricultural analyst at Commonwealth Bank of Australia. The country accounts for a similar proportion of global exports as Ukraine did before Russia’s invasion, he noted. Wheat prices rose by about 60 per cent when the war disrupted production and exports.

Advances in breeding

There is room for further productivity gains, farmers and researchers say.

Advances in seed breeding and farm management have lifted maximum theoretical yields to around 25 kg per millimeter, which should rise to 30 kg and perhaps beyond, said Kirkegaard.

Researchers and breeders are testing wheat varieties whose coleoptiles – the protective sheath that surrounds the shoot – can push up from a soil depth of 10 to 12 centimeters rather than the usual 2 to 4 cm, allowing seeds to be planted into subsoil moisture, according to Greg Rebetzke, a CSIRO scientist. Field trials show long coleoptiles should increase yields by up to 20 per cent, and several varieties should be available commercially in Australia within five years, he said.

“People are now looking at some of the drought technologies we’ve developed and asking if they’ll be useful in their countries,” Rebetzke said, identifying Canada, India, Bangladesh and sub-Saharan Africa as sources of interest. “The dry environment we have is very much the future of some countries that are wetter now.”

Government scientists in Western Australia are experimenting with further re-engineering of soil, adding ingredients such as clay, compost and gypsum to increase the earth’s capacity to hold water and produce wheat, said Gaus Azam, the researcher leading the project.

Ty Fulwood, a grower in Grass Valley, east of Perth, showed Reuters the upshot of those efforts. “They are literally trying to create the perfect soil in 10-centimeter-depth increments,” he said, standing in one of his fields surrounded by test strips of re-engineered earth, where varying amounts of clay had been added to the top half-meter of soil to identify the best growth-enhancing mix.

It’s expensive, Fulwood said, but if the promised doubling of yields is demonstrated, farmers and researchers will put money into it.

Adaptation has limits, to be sure. Wheat doesn’t thrive in hot conditions, which accelerate evaporation and growth phases. Rainfall is not only diminishing but is becoming less predictable.

Plant scientist Zvi Hochman, in a 2017 paper, found hotter, drier conditions had reduced Australia’s maximum achievable wheat yield by 27 per cent between 1990 and 2015.

“With continued effort we can move from achieving 55 per cent of potential yields to about 80 per cent, but going beyond that in a variable climate is likely to be uneconomic,” Hochman told Reuters.

And there are downsides to the new ways. Herbicides can harm the environment and encourage weed strains that are resistant to the chemicals, scientific studies show. Australian farmers are using more synthetic nitrogen as fertilizer — albeit less per hectare than many others, according to the U.N. — which is manufactured using natural gas, a contributor to atmospheric carbon emissions. And they are intervening on a massive scale in the earth.

“We should always be cautious because we are disturbing the natural soil,” said Azam, the researcher. “But the benefits outweigh the risks.”

Other nations

Challenging soil and weather conditions keep Australian yields low by global standards. Last year’s 2.6 tons per hectare lagged behind Canada (3.28 tons) U.S. (3.5 tons), China (5.9 tons), and Britain (7.3 tons), USDA data shows.

Some developing nations, including China and India, have made faster progress than Australia in improving wheat yields since the 1980s. But productivity growth in many advanced economies has been slower, according to the USDA, which global researchers attribute in part to soil degradation and restrictions on fertilizers and pesticides.

Farmers and scientists credit Australia’s system of applied research and low subsidies for helping to set it apart.

They point to the Grains Research and Development Corp, a statutory corporation established in 1990 by an act of parliament to help drive industry innovation. Growers give it one per cent of their grain revenue, topped up by government funding. Its committees blend farmers, scientists and agribusiness executives. That means the research agenda isn’t dominated by farmers seeking quick fixes, nor by scientists pursuing blue-sky projects, said Kirkegaard.

Few countries replicate this model. Canada has levy-funded research groups but they are less centralized. In Europe, some researchers may never speak to a farmer, leading to impractical studies, Kirkegaard said.

Australia has among the lowest agricultural subsidies, according to the OECD. And they go largely to research and biosecurity, rather than payments to farmers or into trade restrictions – common practices elsewhere.

At his farmhouse, surrounded by eucalypt trees, Liebeck said he isn’t daunted by an increasingly hostile climate.

“The challenge of growing more crop off less rain is exciting,” he said. “I’m optimistic.”

The post Less rain, more wheat: How Australian farmers defied climate doom appeared first on Country Guide.

Australia on Thursday said it would loosen biosecurity rules for U.S. beef, something analysts predicted would not significantly increase U.S. shipments because Australia is a major beef producer and exporter whose prices are much lower.

“We are going to sell so much to Australia because this is undeniable and irrefutable Proof that U.S. Beef is the Safest and Best in the entire World,” Trump said in a post on Truth Social.

“The other Countries that refuse our magnificent Beef are ON NOTICE,” the post continued.

Australia imports minimal U.S. beef

Trump has attempted to renegotiate trade deals with numerous countries he says have taken advantage of the United States – a characterization many economists dispute.

“For decades, Australia imposed unjustified barriers on U.S. beef,” U.S. Trade Representative Jamieson Greer said in a statement, calling Australia’s decision a “major milestone in lowering trade barriers and securing market access for U.S. farmers and ranchers.”

Australia is not a significant importer of beef but the United States is and a production slump is forcing it to step up purchases.

Last year, Australia shipped almost 400,000 metric tons of beef worth $2.9 billion to the United States, with just 269 tons of U.S. product moving the other way.

Relaxed restrictions unrelated to trade talks says Australia

Australian officials say the relaxation of restrictions was not part of any trade negotiations but the result of a years-long assessment of U.S. biosecurity practices.

Canberra has restricted U.S. beef imports since 2003 due to concerns about bovine spongiform encephalopathy (BSE), or mad cow disease. Since 2019, it has allowed in meat from animals born, raised and slaughtered in the U.S. but few suppliers were able to prove that their cattle had not been in Canada and Mexico.

On Wednesday, Australia’s agriculture ministry said U.S. cattle traceability and control systems had improved enough that Australia could accept beef from cattle born in Canada or Mexico and slaughtered in the United States.

The decision has caused some concern in Australia, where biosecurity is seen as essential to prevent diseases and pests from ravaging the farm sector.

“We need to know if (the government) is sacrificing our high biosecurity standards just so Prime Minister Anthony Albanese can obtain a meeting with U.S. President Donald Trump,” shadow agriculture minister David Littleproud said in a statement.

Australia, which imports more from the U.S. than it exports, faces a 10 per cent across-the-board U.S. tariff, as well 50 per cent tariffs on steel and aluminium. Trump has also threatened to impose a 200 per cent tariff on pharmaceuticals.

Asked whether the change would help achieve a trade deal, Australian Trade Minister Don Farrell said: “I’m not too sure.”

“We haven’t done this in order to entice the Americans into a trade agreement,” he said. “We think that they should do that anyway.”

— Reporting by Kanishka Singh, Ismail Shakil and Peter Hobson

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China, the world’s largest canola importer, sources nearly all of its imports from Canada but those supplies could be limited by an anti-dumping probe Beijing is conducting. China imposed 100 per cent tariffs on Canadian canola meal and oil this year amid strained diplomatic ties.

Australia, the second-largest canola exporter, has been shut out of the Chinese market since 2020, mainly due to Chinese rules to stop the spread of fungal plant disease, but the trial cargoes could reopen trade and reduce Canada’s market share.

Chinese and Australian officials are finalising a framework to address Beijing’s phytosanitary requirements aimed at preventing the spread of blackleg disease, according to two Australian agriculture industry sources briefed on the negotiations.

“It looks like we’ve found a pathway that works for everyone,” said one of the sources. “Now we need to run a few ships and see if it all works.”

The five trial cargoes will be handled by trading companies once the framework is agreed, the sources said.

Two trading company sources familiar with the negotiations said the shipments would carry between 150,000 and 250,000 tonnes of Australian canola, also known as rapeseed, to China.

The sources declined to be named as they were not authorised to speak publicly on the matter.

In response to a query from Reuters, Australia’s agriculture ministry said: “This is an active and ongoing government-government discussion and details have not yet been finalised.”

China’s Ministry of Commerce and General Administration of Customs did not immediately respond to a request for comment.

China has bought an average of four million metric tons of canola, worth over $2 billion, each year for the last five years, for use in cooking oil, renewable fuels and animal feed.

Australian Prime Minister Anthony Albanese is currently visiting China, underscoring a warming of ties since his Labor government won power in 2022.

The planned shipments follow smaller test deliveries last year, when Australia exported 500 tonnes of canola to China in both June and July 2024, according to Australian trade data.

The negotiations have focused on addressing China’s requirement that canola shipments contain less than one per cent admixture — impurities such as chaff and broken seeds — and its concerns of blackleg contamination, the two sources briefed on the talks said.

Unlike Canadian exporters, who clean their canola before shipping, Australian suppliers often exceed this limit.

Additional demand from China should lift Australian canola prices, traders said, but Australia may not be able to fully replace Canadian canola in China.

The Australian government expects the upcoming harvest later this year to produce 5.7 million tonnes of canola, the least in five years, due to unfavourable weather and a smaller planted area.

Of that, Australia will likely export around four million tons of canola, much of which may be earmarked for longstanding customers in Europe and elsewhere, said one of the trade sources.

“China might struggle to get more than their trial volume depending on how quick they move,” the person said.

China had 159,000 tonnes of imported canola in its stockpiles as of July 4, the lowest level for this time of year in nearly four years, said Zhang Deqiang, an analyst at Shandong-based Sublime China Information.

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Why it matters: High inventories of wheat in Australia, one of the top global cereal producers, could pressure crop prices.

A fire sale of stored grain may be necessary to clear space before the new wheat harvest in the last quarter of the year, which would weigh on benchmark Chicago futures already trading near their lowest since 2020 because of abundant global supply.

Australia sent just 546,000 metric tons of wheat to China during the October to March period, the first six months of its marketing season, down from 2.9 million tons in the first six months of the 2023/24 season and 4.4 million tons in the same period in 2022/23, Australian customs data show.

Shipments from Russia, the world’s largest wheat exporter, have also remained strong despite the second quarter typically being its pre-harvest lean export season.

The next Northern Hemisphere wheat harvest, including Russia’s, will ramp up in coming weeks, pouring cheap grain onto the market and limiting Australia’s export prospects, said Vitor Pistoia, an analyst at Rabobank in Sydney.

“If the current pace of Australian exports continues, we’re going to have 5-6 million tons of carryover from last season’s crop,” he said.

“We are building up a massive problem. It’s not like the global market is short of supply,” he said, adding that it may lead to mass selling of grain that could push prices towards A$300 (C$265) a ton from between A$325 to A$350 now.

Total carryover including grain from past seasons could be as high as 8 million tons, said a source at an international grain trader based in Australia.

“If the new season crops look good, it can become a storage capacity issue. It forces people to sell cheaper into the export market to clear space,” the source said.

Australia’s end-of-season wheat stocks have averaged 3.3 million tons in the last five years, according to data from the U.S. Department of Agriculture.

“Four million tons is comfortable,” the source said. “More than 6 is getting difficult.”

Analysts expect Australia to produce 28 million-34 million tons of wheat this year. That would be down from last year’s 34.1 million tons but well above the ten-year average of 27.6 million tons, according to government data.

Chinese buyers booked four or five 55,000-ton shipments of Australian wheat around the start of May, but these are the only new Chinese purchases this calendar year and have not been followed up with more.

China, which was experiencing hot and dry in key growing regions, is likely to see rainfall in those areas through next Tuesday which could further reduce demand for imported wheat.

Russia, meanwhile, has continued to ship grain at competitive prices even during its off season, said a grain trader in Singapore.

“We were hoping more Australian wheat cargoes would reach destinations in the Middle East and Africa,” they said. “There were expectations that Russia would have less to export.”

— Reporting by Peter Hobson and Naveen Thukral

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China is the world’s top wheat grower and also imports large amounts of grain when domestic supply falls short of demand.

Earlier this week, Henan province, which grows about a third of China’s crop, issued a risk warning as hot, dry weather threatened the wheat growing in its fields.

Chinese buyers have purchased four or five 55,000-ton shipments of wheat from Australia for delivery in July or August and around 200,000 tons from Canada, sources at two major trading firms in Australia said. The wheat is of milling quality.

The bookings from Australia were the first made by China from the country since last year, said one of the traders.

COFCO, the state-owned Chinese firm that handles most of the country’s wheat imports, did not immediately respond to a request for comment.

Wheat imports lower in recent years

China has in recent years been one of the world’s biggest wheat importers, buying in around 11 million tons worth $3.5 billion in 2024. Australia and Canada are typically its biggest suppliers.

But shipments slowed sharply after China reaped large wheat and corn harvests last year and have since remained low.

China delayed or redirected shipments from Australia earlier this year and imported less than a million tons of wheat in the seven months to March 31, Chinese customs data accessed through Trade Data Monitor show.

One of the sources said their company had lowered its forecast of Chinese 2025 wheat production by around 5 million tons but there was no guarantee that more purchases would follow because China has large wheat inventories.

“China is well self-sufficient in feed grains this crop year with heavy stocks,” said Rod Baker, an analyst at Australian Crop Forecasters in Perth, adding that faltering economic growth in China was also depressing demand for grains.

Speculation of Canadian wheat sales to China has been rumbling around Winnipeg, Canada’s grain industry capital, but with few details, according to traders.

Barley also booked

Chinese importers also booked a large amount of barley, according to traders.

Some said that six panamax bulk carriers carrying around 360,000 tons of French or Ukrainian new-crop barley had been sold for delivery in July or August, with others putting the volume much higher at around 1 million tons, also for shipment this summer.

“Chinese wheat and barley import buying has been very quiet in the past year and these are the first major deals I have seen in many months,” a German trader said.

Feed barley purchases with optional origin were from Ukraine or France. The deals were done at a price of around US$250-$254 a tonne delivered to China, one trader said.

— Reporting by Michael Hogan in Hamburg, Peter Hobson in Canberra, Gus Trompiz in Paris, and Ed White in Winnipeg. Additional reporting by Ella Cao in Beijing.

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U.S. President Donald Trump said he will announce reciprocal tariffs on many countries next week, confirming a report by Reuters. Grain traders worry the duties may spark retaliation from importers that would dent U.S. crop sales.

“Any type of moves like this may have a little pushback in some ways against the U.S.,” said Rich Nelson, chief strategist at commodity brokerage Allendale. “Certainly, from a psychological basis, any evolving tariff is a question.”

Trump announced tariffs of 25 per cent on Canada and Mexico on Saturday but delayed them after a negative reaction from investors. U.S. levies against China drew a measured response from Beijing that did not include tariffs on crops in a relief for grain traders.

Most-active CBOT March corn futures ended down 7-3/4 cents at $4.87-1/2 a bushel but remained close to a 15-month peak of $4.98-1/2 reached on Wednesday.

Soybean futures fell 11 cents in the March contract to $10.49-1/2 a bushel after rising on Wednesday to a six-month peak of $10.79-3/4. March wheat finished 5 cents weaker at $5.82-3/4 a bushel, down from a 3-1/2 month high of $5.92-1/2.

There was a “risk off” mentality in the markets ahead of the weekend and following recent gains, traders said.

Improved rains in Argentina helped pressure prices after hot, dry weather in January, they said. Showers this week delivered the country’s soy crop “from the inferno,” according to the Rosario grains exchange.

Argentina is the world’s biggest exporter of soymeal and soyoil and No. 3 corn exporter.

Traders also kept an eye on cold weather in Russia, the world’s biggest wheat exporter, due to concerns about potential damage to its crop.

On Tuesday, the U.S. Department of Agriculture is slated to update global supply and demand estimates in a monthly report. Global wheat imports are likely to drop this year.

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