China buys more corn and soy as USTR praises ‘phase one’ cooperation
China at first put big tariffs on soy in retaliation for Trump's tariffs on them. They aimed to hurt American farmers who are big Trump supporters. Soybeans are a major cash crop in the Midwest.
And it did hurt for a while until Trump recompensed the farmers with subsidies. Meanwhile China needed the soy too much to continue with big tariffs. Soy is a major source of protein in China and their own farmers do not grow enough of it
The USDA announced Tuesday that Chinese importers contracted to buy hefty new amounts of U.S. corn and soybeans just hours after top U.S. and Chinese trade officials met Monday night to review progress of the “phase one” trade pact.
Chinese importers purchased 408,000 metric tons of U.S. corn and 204,000 tons of U.S. soybeans for delivery in the 2020-21 marketing year, according to a daily grain sale report released by USDA. The marketing year for corn and soybeans begins Sept. 1.
The sales come on the heels of a Trump administration statement Monday night confirming that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke over the phone with Chinese Vice Premier Liu He “in a regularly scheduled call.”
The corresponding statement released by USTR lauded “significant increases in purchases of U.S. products by China as well as future actions needed to implement the agreement. Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement.”
Tuesday marks the latest major corn and soybean purchase by China, continuing the country’s quick pace of new crop contracts. On Friday USDA announced sales of 405,000 tons of U.S. new crop corn and 400,000 tons of U.S. new crop soybeans to China, evoking optimism from USTR Chief Agricultural Negotiator Gregg Doud.
“I think with these sales today — the new market here begins Sept. 1 — I think it’s accurate to say … that when we turn the page to Sept. 1, we’ll have a record number of soybean sales on the books to ship to both China and to the world,” said Doud last week. “That’s already the case for corn … We’re going to be really busy loading boats come harvest time and that’s a really good thing.”
President Donald Trump is walking a fine line on China. On the one hand, he’s signaling that his hardball tactics with China over COVID-19 and other issues will be prominent in his bid for reelection. But he also continues to prioritize agricultural trade with China under the “phase one” pact.
“China will own our country if (Biden) gets elected,” Trump told GOP delegates at the Republican National Convention Monday in Charlotte, North Carolina.
But he also highlighted recent record-breaking corn purchases by China. The USDA reported sales of 1.937 million metric tons of corn to China on July 30 and 1.762 million tons on July 14. Both were record-breaking purchases in size.