AFBF Watching Exports To China Closely

An American Farm Bureau Federation Market Intel analysis shows China is buying more U.S. commodities for the upcoming marketing year, starting in September. AFBF Economist Veronica Nigh said the analysis includes corn, soybeans, sorghum and cotton.

“So far, soybeans sorghum and cotton have quite a lot of advanced new crop sales, greater than what they’ve been the last few years. Corn sales, a little bit slower. Even though we are seeing reports of big sales by volume, when you look at those sales as a share of total production that’s expected this year, those sales are still pretty moderate.”

Nigh said large new-crop sales kick-start exports for the new marketing year, but don’t necessarily lead to greater total exports. She added current data shows China is behind its Phase One commitments.

“Through the end of June, China was behind on their purchases that they would need to make in order to reach that commitment. So, unfortunately, it’s going to come down the wire, but we’ll still be looking very closely over these next few months to see how the pace is going.”

Nigh said there are many factors that can influence trade with China.

“There’s a lot of dynamics going on, those that are market driven and those that are politically driven. And so, one thing we do watch pretty closely are cancelled sales. That would be commitments for purchase that never actually materialized into exports. And then I think it’s also important to remember that we’re only a part of the larger China-U.S. relationship.”

Click Here to read the entire Farm Bureau report.

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