US Agricultural Exports to China Expected to Increase

US Trade Representative Announces China's Large-Scale Agricultural Purchases

China has pledged to make significant annual purchases of American farm goods over the next three years, according to US Trade Representative Jamieson Greer. Speaking in a Bloomberg Television interview with Annmarie Hordern, Greer stated that China will make "double-digit billion" purchases of American farm goods annually over the next three years following President Donald Trump's visit to Beijing.

The announcement comes as soybean and corn futures have gained, with soybean futures in Chicago rising as much as 0.8% and corn climbing as much as 1.3%. Wheat also edged higher in response to the news. However, farmers and traders have been seeking more concrete details on the volumes and timing of crop purchases.

China has a history of meeting its commitments, having fulfilled its initial pledge to buy 12 million tons of US soybeans shortly after Trump and China's President Xi Jinping met last year in South Korea. The countries already have an agreement in place for China to buy 25 million tons of soybeans annually over the next few years, which was struck at those talks. Greer stated that the new agreement would encompass not just soybeans, but "everything else."

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

While Beijing has not confirmed the 25-million ton pledge outlined by the White House, Greer expects most of the soybean sales to occur later this year. This would mark a return to historic norms, as China typically books US supplies in the months immediately after the harvest, which starts around September.

President Trump has also emphasized the importance of the agricultural sector, stating that the country will look at "a lot of soybeans for our farmers." He added that China has an "unlimited appetite" for American farm products, and that the country has the best product with the best quality.

The agreement between the US and China is expected to have a positive impact on the agricultural sector, with farmers and traders eagerly awaiting more concrete details on the volumes and timing of crop purchases.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline