Phase one agreement could be good for corn
January 14, 2020 By Ken Anderson Filed Under: News, Trade
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
Hubbs also expects
China to buy U.S. ethanol despite recent reports they have suspended their E10
“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,”
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.
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