In the agriculture world, news of the partial U.S.-China trade deal has sparked a lot of buzz about soybeans. It turns out, wheat could actually end up being a bigger surprise winner.

Speculations is mounting that China will work to fill its wheat-buying quota as part of the detente, a pledge it failed to stick to in the past. While the allotment, set by the World Trade Organization, could be filled by supplies from any country, it still means additional global demand at a time the market is tighter.

Purchases of soybeans, meanwhile, are likely to be hampered by a deadly pig disease that's reducing demand. The oilseed is crushed to make cooking oil and meal, a key ingredient in hog feed.

"The potential that China could secure an additional 5 to 6 million tons of world wheat annually is underpinning Chicago Board of Trade wheat," Chicago-based consultant AgResource Co. said in a report Thursday, Dec. 26.

Wheat traders expect China will soon release the quota, according to AgResource, and prices are already reacting. On Friday, futures for March delivery rose as much as 2.2% to $5.61 a bushel in Chicago, the highest for a most-active contract since August 2018. Futures traded in Paris reached the highest since June.

If Chinese purchases were to reach the quota mark of 9.6-million metric tons, that would represent a big jump in demand. In the six years through 2017, buying has averaged less than 50% of the allotment.

China will likely fill its quota with the cheapest wheat in the market. While that's usually grain from the Black Sea, U.S. supplies have been getting more competitive and international buyers have recently turned to American shipments.

In the week ended Dec. 19, American exporters sold 715,000 tons of U.S. wheat. That follows the previous week's sales of 868,600 tons, which was the most in six years, according to USDA figures, excluding skewed data released after the federal government shutdown earlier this year.

Relatively tighter corn supplies in South America and wheat in top shipper Russia have made American grain more competitively priced. Heavy rain in Europe is also making it harder for growers there to plant, with Consultants Strategie Grains expecting the crop to drop by 3.6% in the European Union. In western Australia, wheat yields have been disappointing due to hot and dry weather.

China hasn't purchased significant volumes of American supply since October. But, underscoring U.S. wheat's competitiveness in world markets, other top Asian importers including Indonesia, Japan, Philippines and Taiwan have snatched up supplies in recent weeks, according to USDA data.

Corn could also benefit if China moves to fill grain quotas, but to a smaller degree. At 7.2 million tons, the allotment is not only smaller, but the Asian nation has historically done a better job of filling it, meaning it wouldn't represent a very big increase in demand.

"The impact on corn values is far less," AgResource said.

This is article was written by Isis Almeida and Michael Hirtzer, reporters for Bloomberg.