Chinese Trade Deal Is Good News  

On December 1, 2018, President Trump met with Chinese President Xi in Buenos Aires to discuss the ongoing trade dispute between the two countries. 
 
“During that discussion, China agreed to purchase a significant amount of agricultural products such as soybeans, but the exact amount has yet to be determined,” says Mike Nickolas, Agtegra EVP/COO of Grain. Additional face-to-face talks between the two countries the first week of January provided an announcement of additional purchases of U.S. soybeans by the Chinese. There has not been an actual announcement of recent export sales because of the U.S. government shutdown; the news of current additional sales has relied solely on rumors within the grain industry. 
 
What the grain trade is estimating is that sales of approximately 150 million bushels of soybeans, just over 10 percent of last year’s total U.S. soybean sales to China have been made since the December 1 meeting. The grain trade is also optimistic that China will also be looking to purchase both corn and possibly even wheat from the U.S.
 
These sales are the first U.S. soybeans purchased by the Chinese in the last six months. However, the 25 percent Chinese tariff imposed on U.S. soybeans entering China remains.
 
“Soybeans will be shipped out of both the Pacific Northwest and the Gulf of Mexico,” Nickolas adds. “This is certainly a start, and we hope that additional Chinese business will come in the near future.”
 
The Chinese are looking to replenish their state-owned soybean stocks, which is not intended for further domestic processing at this time.
 
International Trade, Local Impact

 Agtegra was able to take advantage of selling soybeans to U.S. exporters to be shipped to China via the Pacific Northwest starting in January and continuing through March.
 
“The timing was right for Agtegra, as we are storing an additional 25 million bushels of soybeans that went into space that is typically used for corn storage,” says Nickolas. “Our goal is to get our bunkers and center piles of soybeans shipped prior to April 1.”