Soybean prices surged Monday on the back of a trade truce between the U.S. and China in which Beijing agreed to buy more American agricultural products.
The January futures contract on soybeans rose 1.1 percent at the Chicago Mercantile Exchange.
President Donald Trump and Chinese President Xi Jinping agreed this weekend to hold off on slapping additional tariffs on each other's goods in January for 90 days, giving both countries more time to resolve their ongoing trade war.
As part of the agreement — which was reached over dinner at the G-20 summit in Argentina — "China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately," the White House said in a statement.
The trade war between the world's biggest economies has taken its toll on soybean prices. Earlier this year, China implemented a 25 percent tariff on soybeans coming from the U.S. The tariff has sent the soybean futures down more than 10 percent in the past six months.
Trump tweeted on Monday this agreement will be beneficial for U.S. farmers.
"I'm particularly happy for the American farmer of soybeans as they've been a sacrificial lamb in this spat but the 25% tariff on soybean imports into China still remains for now," Peter Boockvar, chief investment officer at Bleakley Advisory Group , wrote in a note Monday.
Shares of Deere & Co. jumped more than 4 percent Monday.