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Trump's Dinner Date With Xi May Give Soybean Market Bullish Jolt
· China grain traders await lower tariffs before returning to U.S. market
· China to Start Purchasing Ag Products “Immediately” After G20 Meeting with Trump
Trump's Dinner Date With Xi May Give Soybean Market Bullish Jolt
Trump-Xi dinner yields truce that may spur soy, pork recovery
China to start buying U.S. agriculture products ‘immediately’
By Shruti Singh, Bloomberg
December 2, 2018
Soybeans weren’t on the menu, but it looks like President Donald Trump’s dinner date in Buenos Aires with his Chinese counterpart Xi Jinping gave the market the jolt it’s been desperately looking for.
Futures jumped after trading in Chicago began on Sunday. The White House said in a statement that China will start buying U.S. agriculture products “immediately” following the highly anticipated dinner Saturday on the sidelines of the Group of 20 summit in Argentina. While the announcement lacked details and is far from a definitive arrangement, it’s a significant development in the trade war that has beleaguered U.S. farmers.
“This definitely changes some of the bearish psychology in this market,” and traders and analysts will be keeping watch on whether it’s followed by some actual purchases in the next few weeks, Rich Nelson, chief strategist for Allendale Inc. in McHenry, Illinois, said by phone. “We have to wait for a lot of details but we will have a higher push in prices.”
As tit-for-tat tariffs ratcheted up between the countries, soybeans became the poster child of the trade dispute. China, the world’s dominant importer, started shunning U.S. supplies and Chicago futures tumbled as a result. Across the Midwest, the 2018 harvest had been piling up, unsold, in silos, bins and bags.
It’s hard to overstate how important China is for the soybean world. It’s the biggest consumer by far, using the oilseed as a protein in livestock feed. Chinese tariffs on U.S. shipments have turned usual trade flows on their head. Major exporters like Argentina are now buying dirt-cheap U.S. supplies, while domestic premiums in soy king Brazil surged earlier this year.
Many traders and farmers are hoping an eventual China-U.S. pact can help bring trade back to normal, or at least make it more predictable.
“Hopefully, in the next 90 days, negotiations will move forward and we can move to resolve this whole thing,” Lindsay Greiner, president of the Iowa Soybean Association, said by phone Sunday...
China grain traders await lower tariffs before returning to U.S. market
Reporting by Hallie Gu and Dominique Patton; Editing by Alex Richardson, Reuters
December 3, 2018
BEIJING (Reuters) - China will need to drop its steep tariffs imposed on a range of American farm products earlier this year before it can fulfill its pledge to buy a “very substantial” amount of U.S. goods, said Chinese traders on Monday.
China and the United States agreed on Saturday to refrain from setting additional tariffs that would further escalate a months-long trade war that has roiled global markets and halted sales of American soybeans to the world’s top buyer.
The temporary truce on trade followed talks between U.S. President Donald Trump and Chinese President Xi Jinping at the end of a two-day gathering of world leaders in Argentina.
The United States said that Beijing had promised to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products, with purchases of farm goods to start “immediately”.
But no substantial purchases can happen with a 25 percent duty still in place on U.S. soybeans, corn, sorghum and wheat, said buyers and analysts.
“How can you buy U.S. products if China does not reduce the tariffs? We haven’t made any move yet,” said a trader with a major Chinese trading house. He declined to be identified as he was not allowed to be quoted by media.
China’s tariffs on U.S. soybeans had earlier pushed the price of soybeans from Brazil, the world’s top supplier, so high that Chinese buyers could have imported American soybeans and paid the tariff for less.
But that premium has been significantly eroded in recent weeks after China built up large soybean stocks, and demand for soymeal declined in the wake of an African swine fever epidemic ravaging the country’s huge hog herd.
That has in turn made U.S. beans more than $60 per tonne more expensive than those from Brazil, which is due to begin harvesting a record crop in a few weeks time...
REMOVING TARIFFS? ...
China to Start Purchasing Ag Products “Immediately” After G20 Meeting with Trump
By Eric Pfeiffer, Hoosier Ag Today
Dec 2, 2018
President Donald Trump met with Chinese President Xi Jinping at the G20 Summit in Buenos Aires, Argentina on Saturday. Trump agreed that on January 1, 2019 he will leave the tariffs on $200 billion worth of product at the 10% rate and not raise it to 25% as he previously committed. China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between the two countries. China has agreed to start purchasing agricultural product immediately.
President Trump and President Xi agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both China and the U.S. have placed a 90 day timeframe on completing a deal. Once that 90 days is up, the 10% tariffs will increase to 25% if no agreement has been reached.
In a release from White House Press Secretary Sarah Huckabee Sanders, Trump said, “This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi.”
John Heisdorffer, a soybean grower from Keota, Iowa, and American Soybean Association president said, “This is the first positive news we’ve seen after months of downturned prices and halted shipments. If this suspension of tariff increases leads to a longer-term agreement, it will be extremely positive for the soy industry. We want to begin repairing damage done to our trade relations with China, which has been essential to successful soybean exports for years.”
In a statement from Angela Hoffman, Executive Director for the group Farmers for Free Trade, she said, “Any signal, even if temporary, that this trade war may de-escalate is welcome news for farmers. While farmers are cautiously optimistic about this development, they are also keenly aware that they are still subject to the existing painful retaliatory tariffs and lost markets that have hurt their recently harvested crops and income.”
The African Swine Fever outbreak may be a driver in moving negotiations along...