China Buys Big on Corn, Soybeans
China recently made its biggest purchase ever of U.S. corn, which provided a boost to meeting agriculture targets set in the countries鈥 first-phase trade accord.
The U.S. Department of Agriculture said last week that exporters sold 1.762 million metric tons of corn, the fourth-biggest spot deal ever for the grain. The agency on July 10 reported a sale of 1.365 million tons to China.
China is poised to meet or surpass import quotas set by the World Trade Organization for 7.2 million tons of corn from any country in a year. The Asian nation agreed to buy $36.5 billion in agricultural commodities this year from the U.S. as part of a trade accord, up from $24 billion in 2017.
China also has been aggressively buying soybeans.
President Trump said last week that while China鈥檚 purchases of commodities have been significant, the phase one trade deal with the country means 鈥渕uch less鈥 to him than it did when he made it. He said days earlier that he was not considering a phase two.
DTN lead analyst Todd Hultman says he鈥檚 taking China鈥檚 current buying spree at face value.
鈥淯nderstanding that not everything China buys can escape being cancelled later. And that usually depends on how South America鈥檚 crops turns out,鈥 he said. 鈥淲e鈥檙e in a bit of a hole. This is the worst export total for corn in seven years, and for soybeans in six years.鈥
Hultman says it is encouraging that despite ongoing political tensions, China has remained an active buyer of U.S. soybeans. And with Brazilian supplies running out, he suggests China will have to keep coming to the U.S. for at least the next few months.
Sources: Bloomberg, Brownfield Ag News