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China recommits to U.S. ag purchases

China recommits to U.S. ag purchases

Chinese and American delegates met in Hawaii to discuss bilateral relations

By Diego Flammini
Staff Writer
Farms.com

China appears to be ready to make good on its promises set out in a trade agreement signed with the United States.

Meetings between U.S. Secretary of State Mike Pompeo and high-ranking Chinese officials in Hawaii on Thursday resulted in China agreeing to increase its purchases of products like soybeans, corn and ethanol, Bloomberg reported.

Pompeo also alluded to a Chinese dedication to the Phase 1 agreement the two countries signed in January.

“During my meeting with (Chinese Communist Party) Politburo Member Yang Jiechi (China’s vice minister of foreign affairs), he recommitted to completing and honoring all of the obligations of Phase 1 of the trade deal between our two countries,” Pompeo tweeted on Thursday.

As part of the bilateral agreement, China agreed to purchase $36 billion of ag goods in year one of the deal.

But in the first four months of 2020 China has only imported about $5 billion of U.S. ag products, USDA data shows. That figure is about 13 percent of the levels set out in the agreement.

In year two of the deal, China is set to buy $55.8 billion of American farm products.

Commodity markets reacted positively to last week’s news from the U.S. and China.

On Friday, soybean futures prices on the Chicago Board of Trade increased by about 3.5 cents to close at $8.76 per bushel. Soybean prices opened Monday at $8.75 per bushel.

Markets are waiting to see how the situation progresses, said Abhinesh Gopal, head of commodity research with Farms.com Risk Management.

"The news of last week produced knee-jerk positive reactions in soybeans, hogs and cotton," he said. "Prices do not seem like they are rallying based off of that news as ag markets are mostly in a wait and see mode, but it did give some crop prices a nudge higher."


Trending Video

US “Flash Drought” Worst in 133-160 Years + Disease taking a Bite out of US 2025 Corn/Soybean Crops

Video: US “Flash Drought” Worst in 133-160 Years + Disease taking a Bite out of US 2025 Corn/Soybean Crops


A dry August and a “flash drought” in the ECB (Eastern Corn Belt) the driest top 10 to 15 years in 150 to 160 years (Ohio the driest in 133 years) plus disease is taking a bite out of the 2025 U.S. corn and soybean crops.
It's going to be an early harvest. This could be the start of the 89-year drought cycle that may have been delayed until 2026 as La Nina maybe returning.
The USDA September crop report is all about record corn ears and record soybean counts but the October USDA crop report will be about pod and ear weights.
Stats Canada reported higher forecasts for the 2025 Canadian Prairies all wheat and canola crops vs. last year based on satellite imagery but are they overestimating production?
The 2025 Great ON Yield Tour and Quebec crop tours are projecting corn and soybean crops below the 10-year average.
China's Vice Commerce Ministry Li Chenggang visits Washington this week as we continue to connect the dots is a positive sign towards a China/U.S. trade deal. But will U.S. farmers have a winter without China as they buy more soybeans from Uruguay/Argentina? U.S. Northern Plain soybean farmers are seeing red with flat prices at $8.97/bu!
U.S. corn exports on record pace up 99% vs. last year.
Fund short covering continues in corn futures bottom is in!