Jared Malsin reported in today's Wall Street Journal that, "An international agreement to restore Ukraine’s Black Sea grain exports is showing early progress, with 18 ships moving to and from…
Earlier this week, Bloomberg News reported that, “American soybean exporters sold several cargoes to Chinese state-run buyers, according to people familiar with the matter, showing that some transactions are still going through even after officials in Beijing ordered a pause in some purchases.
Shippers sold as many as four cargoes of U.S. soybeans from the new crop, said the people, who asked not to be named because the information is private. State-run stockpiler Sinograin was bidding earlier for Pacific Northwest cargoes, the people said.
“Chinese government officials have told major state-run agricultural companies to halt imports of some American farm goods including soybeans, people familiar told Bloomberg News on Monday. U.S. cotton and corn imports by state buyers have also been paused, a person said.”
U.S. Weekly Net Soybean Sales to China: (This data indicates they are still buying) pic.twitter.com/lOLlJbZd1Z— Michael McDonough (@M_McDonough) June 4, 2020
On Wednesday, Costas Paris reported at The Wall Street Journal Online that, “Chinese state-controlled companies have canceled some shipments from U.S. farm exporters, according to maritime officials, as tensions between Washington and Beijing rise over China’s handling of pro-democracy protests in Hong Kong and the coronavirus pandemic.
‘A handful of shipments of livestock feed, corn, pork, cotton and some meat imports are pushed back,’ said a senior Chinese shipping executive involved in China farm imports who asked not to be identified and who has been briefed on Beijing’s move.
“‘Private Chinese exporters are not part of this, but it could escalate, depending on how the relationship between the U.S. and China goes forward,’ this executive said.”
The Journal article stated that, “A second Chinese shipping executive said China state importers have canceled between 15,000 and 20,000 metric tons of U.S. pork shipments, about 10 days’ worth of orders. Beijing is also holding back some U.S. shipments of corn and cotton, he said, and further actions would depend on Washington’s response to China’s tightening grip on Hong Kong.
“If Washington escalates in its response, this executive said, ‘We could be back at another round of tariffs and limitations,’ he said. ‘There is a lot of anger here, because Hong Kong is a red line.'”
Meanwhile, on Thursday, Bloomberg News reported that, “China’s commercial soybean importers are likely to keep buying from the U.S. to cover a shortage later in the year despite rising bilateral tensions, according to an influential Chinese agricultural consultant.
“Crushing plants haven’t yet purchased enough supplies considering that hog breeding is expected to recover and demand for soybean meal in animal feed is set to grow, according to Shanghai JC Intelligence Co.”
More broadly with respect to current U.S., China dynamics, Wall Street Journal writers Alison Sider and Ted Mann reported on Thursday that, “The Trump administration threatened Wednesday to bar mainland Chinese airlines from flying to and from the U.S. starting later this month, saying Beijing has failed to approve resumption of these routes by U.S. carriers.
“The threat of a ban was the latest sign of souring U.S.-China relations that are at their worst in more than three decades.”
Nonetheless, Bloomberg’s Jenny Leonard reported on Thursday that, “U.S. Trade Representative Robert Lighthizer said he feels ‘very good’ about the progress of the phase one trade agreement with China, which he said is honoring the pact amid the coronavirus pandemic.
“‘On the structural changes, China has done a pretty good job,’ Lighthizer said Thursday during a virtual event held by the Economic Club of New York. ‘And we’ve seen significant purchases over the course of the last many weeks.'”
Ms. Leonard indicated that,
On Monday and Tuesday of this week, China bought $185 million worth of U.S. soybeans, he said, refuting a report that Beijing wasn’t living up to its commitments on the commodity purchases.
“His comments come as tensions between the U.S. and China have escalated in recent weeks, throwing into question the stability of the initial trade agreement.”
More specifically with respect to Phase One purchase targets, Bloomberg’s Mike Dorning reported on Thursday that, “Trump is back to bashing China. The Asian nation’s roaring economy was stalled for months by the coronavirus pandemic, cutting its demand for imports. And a plunge in Brazil’s currency is making products produced by one of the U.S.’s main international agricultural competitors cheaper.
“‘There’s absolutely zero chance‘ of reaching the purchase commitment announced in January when the deal was reached, said Joe Glauber, the U.S. Department of Agriculture’s former chief economist. ‘They’re just so far behind.’
Mr. Dorning explained that, “The U.S. Agriculture Department last week lowered its forecast for exports of farm goods to China by $1 billion, based on reduced demand.“The USDA forecasts based on the federal fiscal year, which ends Sept. 30, leaving out the months after the fall harvest when the U.S. most actively exports. Over the past seven years, 47% of U.S. farm exports to China were in the final three months of the year, according to [Veronica Nigh’s (a trade economist for the American Farm Bureau Federation)] analysis of USDA data.”