China recently made its biggest purchase ever of U.S. corn, which provided a boost to meeting agriculture targets set in the countries’ first-phase trade accord.
The U.S. Department of Agriculture said last week that exporters sold 1.762 million metric tons of corn, the fourth-biggest spot deal ever for the grain. The agency on July 10 reported a sale of 1.365 million tons to China.
China is poised to meet or surpass import quotas set by the World Trade Organization for 7.2 million tons of corn from any country in a year. The Asian nation agreed to buy $36.5 billion in agricultural commodities this year from the U.S. as part of a trade accord, up from $24 billion in 2017.
China also has been aggressively buying soybeans.
President Trump said last week that while China’s purchases of commodities have been significant, the phase one trade deal with the country means “much less” to him than it did when he made it. He said days earlier that he was not considering a phase two.
DTN lead analyst Todd Hultman says he’s taking China’s current buying spree at face value.
“Understanding that not everything China buys can escape being cancelled later. And that usually depends on how South America’s crops turns out,” he said. “We’re in a bit of a hole. This is the worst export total for corn in seven years, and for soybeans in six years.”
Hultman says it is encouraging that despite ongoing political tensions, China has remained an active buyer of U.S. soybeans. And with Brazilian supplies running out, he suggests China will have to keep coming to the U.S. for at least the next few months.
Sources: Bloomberg, Brownfield Ag News