Observers will be keeping an eye on next week’s scheduled trade meeting between President Donald Trump and Chinese leader Xi Jinping. Among the items on the table are China’s promised purchase of American soybeans. University of Nebraska ag economist Jeff Peterson says so far, China is living up to its end of the bargain.
“If you bring together what they bought and take a portion of the unknown category, it would say that they probably purchased about 12 and a half million metric tons of beans, and they’ve started to ship some of those beans. White House administration, some of their fact sheets said that they take 25 million metric tons. So far, they’re about halfway. I think they will get them all, but it will take all the crop year. So, they’re well on their way.”
However, Peterson says China has a wild card it may play.
“One potential thing that we’re watching in the back of our minds that we’re a little concerned about is that did China purchase a bunch of these beans, come into this meeting and say, okay, we’ve bought these beans, we don’t have to ship them. What are you going to do about those arms sales to Taiwan? Are they going to use that as a leverage point on us? Don’t know. Keep an eye on it. That could be something that could put pressure on soybeans.”
Peterson says he’s also keeping an eye on the European market. He says the September WASDE actually increased Europe’s corn production, but the dry weather there and the numbers don’t support that. Peterson expects their demand for corn imports to actually rise.