U.S.-China agreement still on track; market analyst reacts
December 26, 2019 By Ken Anderson Filed Under: News, Trade
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
“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.
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