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U.S.-China agreement still on track; market analyst reacts

It appears the phase one trade agreement between the U.S. and China is staying on track.

President Trump indicated on Tuesday that he and Chinese President Xi will have a signing ceremony once the agreement is complete. And a Chinese Foreign Ministry spokesman said on Wednesday that officials from both countries remain in close communications as final details of the agreement and signing are worked out.

The signing of the agreement is expected to happen in early January.

Meanwhile, market analyst Arlan Suderman with INTL FCStone says the market remains cautiously optimistic about the agreement.

“I don’t expect it to solve the problem with soybeans, because African Swine Fever is hurting demand just too much,” Suderman says. “But it could give some unexpected demand to some of the other commodities, helping give a lift to U.S. agriculture.”

Suderman says that unexpected lift could include corn and ethanol.

“There’s been rumors—and you never know what to believe when it comes to China—but there’s been rumors of maybe a billion gallons of ethanol going to China,” he says. “Previously, they were buying 200 to 300 million gallons per year from the United States, prior to the trade war.”

Suderman says wheat could also benefit.

“I think we could see one to two million metric tons of wheat go there—in addition to pork, beef and poultry, certainly helping carry some weight as well.”

Suderman says he’ll be watching to see of there is a surge in pork exports to China with the Chinese Lunar New Year just over a month away.