Trade

A recent news article reported that Chinese imports of U.S. soybeans increased in February, contributing to a narrowing of the trade deficit between the two countries.  Nonetheless, the imports were significantly lower than last February.   Meanwhile, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin continued trade negotiations with China in Beijing last week.  Chinese Vice Premier Liu He travels to Washington, D.C. this week, as the talks continue.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are scheduled to travel to China next week to start a new round of face-to-face trade talks.  As the negotiations continue, many Corn Belt producers face substantial financial losses due to flooding in the Midwest.  The ongoing trade uncertainty and flooding come at time when the agricultural economy is struggling to rebound from its peak in 2013.

In testimony last week before the Senate Finance Committee, U.S. Trade Representative Robert Lighthizer displayed a more cautious tone in describing U.S., China trade negotiations.  Meanwhile, recent news items provided perspective on variables impacting the trade flows of soybeans and pork to China.

Last week, China purchased U.S. soybean and sorghum exports.  Nonetheless, farmers remained concerned about a trade resolution between the U.S. and China as more melancholy reports emerge about progress in the on-going negotations.

News articles this week reported that a trade deal between the U.S. and China could be close.  Meanwhile, Secretary of State Mike Pompeo provided additional trade perspective while visiting Iowa on Monday.  Today’s update looks at these developments in more detail.

On Friday, Bloomberg writers Joshua Gallu and Millie Munshi reported that, “President Donald Trump said he has asked China to immediately remove all tariffs on U.S. agriculture, including beef and pork, citing progress in trade talks between the two nations.”

U.S., China trade talks resumed last week in Washington, D.C., and extended into the weekend.  As the negotiations unfolded, Secretary of Agriculture Sonny Perdue indicated that China committed to buy an additional 10 million metric tons of U.S. soybeans.  And citing progress made in the talks, President Trump tweeted Sunday that, “I will be delaying the U.S. increase in tariffs now scheduled for March 1.”   News items tracking these developments are highlighted in today’s update.

After continuing last week in Beijing, U.S., China trade talks will resume again this week in Washington, D.C.  In addition, recent news items continue to highlight impacts of the ongoing trade dispute on the farm economy.  Today’s update focuses on these two issues in more detail.

China purchased more U.S. soybeans last week as trade negotiations between the two countries are set to continue this week in Beijing.  Meanwhile, a front page article in the Wall Street Journal last week pointed to signs of strain in the U.S. agricultural economy.  It appears that farmers will continue to deal with uncertainty on the trade front as 2019 unfolds.

As the U.S. and European Union trade negotiations unfold, the two sides have competing perspectives over what will be discussed:  The U.S. has included agriculture in its Summary of Specific Negotiating Objectives, while the EU has not.  Despite the discord, recent trade data indicates that the EU has purchased an increasing amount of U.S. soybeans.  Meanwhile, Bloomberg News reported Friday that Chinese negotiators made a “buying spree offer” during the U.S.-China trade discussions earlier this month in Beijing.

As he did last January in Nashville, President Donald Trump addressed the American Farm Bureau Federation’s Annual Convention in New Orleans on Monday.  Today’s update highlights news reports surrounding the President’s appearance at the convention.

As trade talks between the U.S. and China kicked off this week in Beijing, news reports pointed out that China “made their third large U.S. soybean purchase in the past month on Monday.”  The trade talks went a day longer than scheduled, and concluded with a statement that noted: “The talks also focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.”  Meanwhile, a Financial Times article explored how the ongoing U.S.-China trade row is negatively impacting the U.S. farm sector.

A U.S. government delegation will travel to Beijing this week to discuss the ongoing trade war between the two countries.  A recent news article noted that optimism associated with the talks has been a contributing variable in a climb in the price of soybean futures.

On the night of Friday, December 21st, the U.S. government began a partial government shutdown.  Today’s update points to recent news items that highlight how the shutdown may impact information related to U.S. soybean exports, as well as USDA trade mitigation program payments.

Reuters writer Karl Plume reported last week that, “China on Wednesday made its first major purchases of U.S. soybeans since President Donald Trump and his Chinese counterpart Xi Jinping struck a trade war truce earlier this month, providing some relief to U.S. farmers who have struggled to find buyers for their record-large harvest.”

Last week, USDA released U.S. agricultural export data that spanned the first ten months of 2018.  Although the overall value of exports was higher for this time period compared to 2017, there were reductions in both the value and volume of soybean exports, particularly to China.  Business news articles also point to continued adjustments in global commodity markets due to the ongoing U.S., China trade war.  Meanwhile, recent news items continue to provide more clarity to U.S., China trade activity stemming from last week’s meeting in Buenos Aires.

This weekend in Buenos Aires, President Trump took important trade policy action that could impact U.S. agricultural markets.  After signing the USMCA, the president indicated that he would quickly withdraw from NAFTA, in an effort to pressure the legislative branch into action on the updated trade measure.  Meanwhile, a White House statement at the conclusion of the president’s meeting with Chinese President Xi Jinping Saturday night, indicated that, “China has agreed to start purchasing agricultural product from our farmers immediately.”

In its latest quarterly forecast for U.S. agricultural trade on Thursday, USDA reduced its fiscal year (October/September) 2019 export projections, “largely due to decreases in soybeans and cotton.”  And news articles this week provided additional insight into the market ramifications of the ongoing trade war with China, while trade aid payments from USDA have begun […]