Phase one agreement could be good for corn
The soybean and pork sectors are expected to be the main beneficiaries of the phase one trade agreement with China. But what about corn?
“I do believe China will buy corn and corn-related products, like ethanol and distillers grains,” says University of Illinois ag economist Todd Hubbs.
“They have a global quota on corn at 7.2 million metric tons, which is just a little over 280 million bushels—and through November of 2019, they’ve only bought 12.3 million bushels,” he says. “So there’s space there. It doesn’t mean they’re going to buy all of their corn from us, but there’s space to grow there, for corn in particular.”
Hubbs also expects China to buy U.S. ethanol despite recent reports they have suspended their E10 ethanol mandate.
“It could be relatively strong. We’ve seen them do as much as 200 million gallons before in a marketing year—and I think we could see them at least get 100 million gallons,” he says.
Hubbs says he’s skeptical China will be able to reach the 40 billion dollar purchase level being discussed by the Trump Administration, but adds, “If they’re going to hit 16 billion above 24 billion, I think corn and corn-related products are going to be in the mix.”
A signing ceremony for the phase one agreement is set to take place Wednesday at the White House. It’s still not clear when details of the agreement will be released.