Chinese Shopping for Food

As part of the pending trade deal between the U.S. and China, the Chinese are expected to go on a food-buying frenzy.

Reports out this week suggested that China could buy $20 billion dollars in U.S. agricultural exports in the first year, a return to the levels from 2017, before the trade war. Last year, Chinese purchases of major U.S. products plummeted under $15 billion as both countries imposed tariffs on one another.

If China goes on a shopping spree, that should help boost prices for major U.S. exports to China, like cotton, pork, and soybeans, but supplies of many U.S. commodities are still unusually high after almost two years of tariff-reduced trade.

Major agricultural markets had a muted response to this week’s news, as many market watchers had been hoping for even bigger purchases.

As of midday Friday, soybeans for delivery in November traded for $9.31 per bushel, December lean hogs were worth 66 cents per pound, and December cotton fetched 65 cents per pound.