In this file:


·         Reality Check: China Won’t Immediately Start Buying U.S. Ag Goods

·         U.S. expects immediate action from China on trade commitments

·         Trump vows 'very big' ag benefits from trade truce, but few Iowa farm leaders expect export bump

·         Chinese Firms Worry the U.S. Trade War Thaw Could Be Shortlived


·         China’s need for US pork could be on the rise

·         Analyst: Negativity Surrounding Ceasefire’s Impact on Ag is Nonsense




Reality Check: China Won’t Immediately Start Buying U.S. Ag Goods


By Tyne Morgan, US Farm Report, Host

via AgWeb - Dec 3, 2018


The cease-fire between the U.S. and China sent soybeans higher, with prices ending the day up double digits. Purdue University agricultural economist Wally Tyner said the meeting Saturday night was a step in the right direction.


“I think it's a meaningful process in the sense that it limits the escalation,” said Tyner.


That escalation would have manifested in a tariff on all $267 billion worth of Chinese imports of 25 percent, up from the current 10 percent. The threat is now on hold after President Donald Trump and his Chinese counterpart Xi Jinping agreed to a 90-day window to negotiate a permanent cease-fire to the trade war.


“In that sense it's good, but it doesn't do anything about the tariffs that are already in place, and that's the concern,” said Tyner.


The White House touted over the weekend and again on Monday that China will immediately start buying U.S. agricultural goods. However, agricultural economists like Tyner warn with tariffs still in place, that may not be a reality anytime soon.


“I don't think there's going to be a rush to buy U.S. products,” said Tyner. “On the other hand, it's pretty clear now that Brazil and Argentina cannot supply all of the Chinese needs. Saying that they're [China] going to start buying U.S. products may just be a recognition of the reality that they have to buy some product, but it's not going to be a large amount.”


Tyner said the U.S. is still going to see a reduction in total demand; the extent of that demand loss is still unknown. He said some other countries are coming to the market to buy U.S. soybeans, eating up some of the lost demand, but he said it’s not to the extent it would have been without the trade war with China.


With soybean exports struggling, time is running out in the typical export window to ship beans to China before the Brazilian crop comes online. Tyner said even if exports resume today, he’s doubtful the U.S. can export to the level it saw before tariffs were put into place.


“I don't think, in soybeans, we can make up the lost ground,” said Tyner. “Our estimate was that the total loss and demand for the U.S. would be about 29 percent. I think that's still a good number - it could go up or down – but what we need is a long-term settlement.”


Tyner said he is watching what happens in the next 90 days closely...


more, including video report [1:31 min.]



U.S. expects immediate action from China on trade commitments


By David Lawder and Jeff Mason, Reuters

via - December 2, 2018


WASHINGTON (Reuters) - The United States expects immediate action by China on trade issues after a deal reached by the countries' leaders, including lower tariffs on automobiles and measures against intellectual property theft and forced technology transfers, a White House official said on Monday.


U.S. President Donald Trump and Chinese President Xi Jinping agreed to hold off on new tariffs for 90 days during talks in Argentina on Saturday, declaring a truce following months of escalating tensions on trade and other issues.


That 90-day period will begin on Jan. 1, White House economic adviser Larry Kudlow told reporters.


The Chinese offered more than $1.2 trillion in additional commitments on trade, Treasury Secretary Steve Mnuchin said on Monday. Kudlow said that figure was a broad benchmark and referred to private transactions for buying U.S. goods, subject to market conditions.


China also committed immediately to start lifting tariffs and non-tariff barriers, including reducing its 40 percent tariffs on autos, Kudlow said.


"We expect those tariffs to fall to zero," he told reporters.


Americans will get majority ownership in companies in China for the first time, which should help address top U.S. concerns about including intellectual property theft and forced technology transfers.


None of the commitments were agreed to in writing and specifics had yet to be hammered out.


Mnuchin said there was a shift in tone at Buenos Aires from past discussions as Xi offered a clear commitment to open China's markets to U.S. companies.


"This is the first time that we have a commitment from them that this will be a real agreement,"


Mnuchin told CNBC.


Kudlow, director of the National Economic Council, said he, Mnuchin and U.S. Trade Representative Robert Lighthizer held two private meetings with China's Vice Premier Liu He in Argentina and he told them that Beijing would move immediately on the new commitments.


"The history here with China promises is not very good. And we know that," Kudlow said. "However, I will say this: President Xi has never been this involved."


Kudlow said: "They cannot slow walk this, stall this, meander this. Their word: ‘immediately.’"


The truce boosted global markets on Monday with world stocks rising to their highest in about three weeks. On Wall Street, the benchmark S&P 500 gained nearly 1 percent, although the index had come off its earlier session highs in afternoon trading.


Kudlow said U.S. officials will monitor Chinese progress on enforcing the commitments very closely.


Trump has appointed Lighthizer, one of the administration's most vocal China critics, to oversee the new round of trade talks with China, officials said.


The appointment of Lighthizer, who just completed a new agreement with Canada and Mexico , may signify a harder line in talks with Beijing and marks a shift from past practices where Mnuchin had a lead role.


"He's the toughest negotiator we've ever had at the USTR and he's going to go chapter and verse and get tariffs down, non-tariff barriers down and end all these structural practices that prevent market access," White House trade adviser Peter Navarro told National Public Radio earlier on Monday.


Kudlow said he and Mnunchin would...





Trump vows 'very big' ag benefits from trade truce, but few Iowa farm leaders expect export bump


Donnelle Eller, Des Moines Register (IA)

Dec. 3, 2018


A new U.S.-China trade truce is welcome news, say Iowa farm leaders, but few expect to see an immediate bump in soybean or pork exports to Beijing despite assurances from China that it will purchase "a very substantial" amount of American goods.


"Any positive news is good," said Kirk Leeds, CEO of the Iowa Soybean Association, about President Donald Trump's meeting with Chinese President Xi Jinping during the Group of 20 summit in Argentina over the weekend.


"That meeting could have gone the other way — it could have turned into a meeting they walked out of without issuing a joint statement," Leeds said. "The fact that there was clearly a positive conversation is reason to be optimistic."


Trump and Xi reached a trade cease-fire agreement that will give negotiators 90 days to start structuring a new trade pact.


During that time, the U.S. will halt plans to increase tariffs on $200 billion in Chinese goods to 25 percent, and China will purchase "a very substantial amount of American agriculture, energy and industrial goods" to cut the trade imbalance between the countries, the White House said.


The goods include soybeans, beef, oranges, pistachios and red wine — but not pork.


The president said the deal will "have an incredibly positive impact on ...  every type of product."


"Farmers will be a a very BIG and FAST beneficiary of our deal with China," Trump tweeted Monday. "They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants. Farmers, I LOVE YOU!"


    Farmers will be a a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants. Farmers, I LOVE YOU!

    — Donald J. Trump (@realDonaldTrump) December 3, 2018


The cash price for soybeans climbed 11 cents Monday, showing a muted reaction to the news.


"The markets aren't overly excited. They're like most of us in thinking, 'Yes, it's positive, but there are very few details,'" Leeds said, noting the Chinese media hadn't reported Monday that the country plans to make any substantial purchases.


Dermot Hayes, an Iowa State University economist, said private Chinese buyers are unlikely to buy U.S. farm goods that are more expensive when compared to their global competition.


"Maybe the Chinese government will make the purchases," Hayes said.


If China does begin buying U.S. soybeans soon, it could help alleviate farm fears that America could lose a substantial portion of the Chinese market, said Sen. Chuck Grassley, R-Iowa.


"That would probably re-establish our markets, so the long-term problems that soybean producers thought we'd have maybe won't be as serious," Grassley said.


"I won't say that we haven't lost some markets, but that loss would be greatly diminished" with a trade resolution, he said...





Chinese Firms Worry the U.S. Trade War Thaw Could Be Shortlived


    Trump, Xi agreement in Argentina may just delay hostilities

    Truce puts on hold U.S. plan to increase tariffs to 25 percent


By Bruce Einhorn and Daniela Wei, Bloomberg

December 3, 2018


Exporters of bags to toys in China cautioned that the trade war truce between the U.S. and China may provide just a minor respite in hostilities.


The U.S. agreed to refrain from raising tariffs on $200 billion of Chinese goods from a current 10 percent to punitive levels of 25 percent as planned on Jan. 1, according to announcements that followed the meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Argentina. China agreed to buy American agricultural, energy and industrial goods.


The catch: the ceasefire is just for 90 days, after which the U.S. could revert to its tariff-raising plan if it sees no progress on structural reform. That timeline could be too tight to make progress on contentious issues such as China’s policies on technology transfers, intellectual property right protections and state-sector subsidies.


“Winter will continue,” said Jennie Zhang, chairman of Guangzhou Jinhuamei Leatherware Co., a maker of leather belts and handbags that were hit by the 10 percent tariffs Trump imposed. “The actual agreement seems more like just slightly delaying the problem instead of coming up with effective solutions.”


The two countries didn’t issue a joint statement with a framework for talks. A statement released by the Chinese government didn’t mention the 90-day time frame.


Since April, the Trump administration has announced three rounds of tariffs on as much as $250 billion of imports from China. In September, Trump threatened to go all-in with tariffs on the remaining Chinese products “on short notice if I want” -- a step that could have meant higher prices on popular imports such as Apple smartphones and Nike shoes.


Investors in Hong Kong are cheering the U.S.-China detente. Chinese pork producer WH Group Ltd., owner of U.S.-based Smithfield Foods Inc., soared 12 percent. Hurt by China’s tariffs on American meat, WH has been the fifth-worst performer on the Hang Seng this year.


Shares of Shenzhou International Group Holdings Ltd., a top supplier to Nike Inc. and Adidas AG, advanced 4.3 percent to close at 99.05 Hong Kong dollars Monday, outpacing the 2.6 percent increase for the benchmark Hang Seng index. Shares of Li & Fung Ltd., which exports garments, toys and sporting goods, rose 4.4 percent.


Manufacturers, however, are less sanguine...


more, including links



China’s need for US pork could be on the rise


By Meghan Grebner, Brownfield

December 3, 2018


China recently placed its largest order of US pork since the start of the trade war.  A livestock economist says he wasn’t surprised.


In this Managing for Profit, Steve Meyer with Kerns and Associates talks about the buy and how the ongoing battle with African Swine Fever will impact their consumption of US pork into 2019.


AUDIO: Steve Meyer, Managing for Profit


document, plus audio [3:03 min.]



Analyst: Negativity Surrounding Ceasefire’s Impact on Ag is Nonsense


By Tyne Morgan, US Farm Report, Host

via AgWeb - December 4, 2018


Unknowns regarding the 90-day trade truce between the U.S. and China still persist. It’s some of those unknowns causing bearish outlooks to surface, with some economists and analysts saying China won’t buy U.S. ag goods right away. However, Allendale’s Bill Biedermann says that negativity is nonsense.


Tuesday morning on Fox Business Treasury Secretary Steve Mnunchin said agriculture will be the first line item in trade talks. He said, “Our expectation is that there will be specific deliverables” and timelines from China.


Biederamann said farmers will be the first beneficiary of any deal with China, followed by natural gas. Mnuchin said Monday the deal with China could be worth $1.2 trillion. Biedermann said with a deal that big, it will take time to iron out details, but the rewards from any deal for agriculture could be great.


“That’s a lot of money and a lot of trade,” said Biedermann.


Agriculture Secretary Sonny Perdue said on Monday in Chicago that he thinks China will come back to the market and start buying January 1, 2019, while the current tariffs on agriculture goods still remain in place. However, Biedermann doesn’t think the tariffs will harm ag exports in the interim.


“I don’t think that’s going to be an issue for the market,” said Biedermann. “I think they are going to buy anyway. It is going to take some time. This is a really big deal, and if I was China, as far as I’m concerned, I would be telling all my buyers ‘go out and get it bought, get it bought now, and then after you have it bought, I’ll announce we’re going to reduce the tariffs on U.S. beans.’ Everybody will make money if they do it that way.”


Perdue also said Monday China would buy a number of U.S. ag goods, including rice, poultry, sorghum, wheat, pork and soybeans


Despite the good news, Biedermann said traders continue to be bearish. That bearishness isn’t necessary, as he thinks China is already coming back to the market to buy.


“I don’t agree with all these people who are bearish, saying it’s not going to happen,” said Biedermann. “in fact, there are have been three U.S. ‘unknown’ purchases of soybeans in the last five days. I think it’s about ten cargoes. It’s a lot of beans. I think that could be China. I don’t know—I’m just guessing, but I do know they’ve bought some pork lately, too.”


Biedermann said when you look at recent exports, the shuffling game has already happened for soybeans, with countries stepping up to buy U.S. soybeans.


“We’ve had about 300 million bushels of buys outside of China—non normal buyers- buy from us,” said Biedermann. “That’s a pretty good amount of demand.”


He said if you look at the exports already on the table, and then you throw China into the market and they start buying, it only builds into that momentum.


‘”I don’t’ think there’s a lot of downside in this market,” said Biedermann...


more, including video report [3:35 min.]