The end may be in sight for a trade war with China that had stalled all U.S. soybean purchases from the nation.
Treasury Secretary Scott Bessent announced Oct. 30 that China will purchase 12 million metric tons of soybeans during this season and 25 million tons annually for the next three years following President Donald Trump’s meeting to hammer out a wide-ranging trade deal with his counterpart Xi Jinping.
Few other details emerged late last week, and markets will probably remain volatile until clarification is issued.
A commitment of 12 million tons for this year would be in line with many analysts’ forecasts, according to Bloomberg News. China has little need for additional soybeans currently as it has built up ample supplies with record shipments from South America.
The amount is a “fairly sizable reduction from a historical standpoint,” Brian Grete, a senior grain and livestock analyst at Commstock, told Bloomberg.
In the longer term, purchases of 25 million tons a year would be “basically getting back to normal,” Grete added. He said the details give soybean farmers and the markets “a little more security in terms of what should be known about the demand side of things from China.”
The U.S. Senate adjourned Oct. 30 and won't meet again until Nov. 3. This extended the government shutdown until at least its 34th day, which would match the longest lapse in funding in history.
“Soybeans went up the last few days recently, but there probably won’t be more change, real soon,” said Michael Langemeier, director of the Purdue University Center for Commercial Agriculture.
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