Soybean and corn futures rise as US says China to buy more American crops

Soybean and corn futures gained as US Trade Representative Jamieson Greer said China will make large purchases of American agricultural products, with President Donald Trump also emphasising that the nation will look at “a lot of soybeans for our farmers.”

China will make “double-digit billion” purchases of American farm goods annually over the next three years after Trump’s visit to Beijing, Greer said Friday in a Bloomberg Television interview with Annmarie Hordern. Trump said on Fox News that the country will be buying a lot of American farm products.

“They have an unlimited appetite, as the expression goes,” Trump said in the interview. “When you have that many people, they need it, and we have the best product with the best, certainly the best of everything.”
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Soybean futures in Chicago rose as much as 0.8%, with corn climbing as much as 1.3% and wheat edging higher. Still, farmers and traders have been searching for more concrete details from the talks, including on volumes and timing of crop purchases. Grain markets fell on Thursday amid a lack of information around agricultural buying as the talks between Trump and China’s President Xi Jinping kicked off.

China met an initial pledge to buy 12 million tons of US soybeans shortly after Trump and Xi met last year in South Korea, reviving flows that had been stalled for months due to a broader trade rift between the two sides.

Greer said the countries already have an agreement for China to buy 25 million tons of soybeans annually over the next few years that was struck at those talks. The new agreement would be encompass not just soybeans, but “everything else.”

While Beijing has never confirmed the 25-million tonne pledge that was outlined by the White House, Greer said most of the soybean sales are expected to come later this year. That would be a return to historic norms, as China has typically booked US supplies in the months immediately after the harvest — which starts around September — when the country’s supplies are most competitive globally.

If the volumes are realised, it would mark a return to roughly average levels of soybean trade, rather than expanded access.

“We expect most of the soybean sales to go on in the later part of the year, but we’ve seen some there already,” Greer said. “So we’re already seeing them start to fulfil some of their promises.