China Getting Ready to Buy More U.S. Corn After Trade Talks

China to buy U.S. corn. ( MGN Image )

(Bloomberg) -- China’s state grain buyer is preparing to snap up more U.S. corn in anticipation of a trade deal between the two countries, according to people familiar with the matter.

Sinograin was in the market agreeing contract terms for potential purchases on Thursday so it could act quickly in the event of an agreement being reached during talks in Washington, the people said, asking not to be identified because the matter is confidential.

The deals would dovetail with a proposal by Beijing to buy an additional $30 billion a year of U.S. agricultural products including corn, soybeans and wheat as part of a possible agreement. President Donald Trump, who will meet with China’s top trade negotiator Friday afternoon in Washington, said this week that talks involved Beijing buying “a lot” of corn.

A Sinograin spokesman declined to comment. Corn for May delivery was little changed at $3.845 a bushel Friday after rising as much as 2 percent on the Chicago Board of Trade Thursday.

U.S. farmers have been at the center of Trump’s trade war after Beijing last year slapped tariffs on a range of American agricultural products. China has repeatedly offered to increase purchases to shrink the U.S. trade deficit and end the spat.

It has returned to the U.S. market for soybeans in recent months amid a temporary truce between the nations, but traders have been waiting for it to be extended to other products, especially corn.

Additional purchases would boost prices that have struggled to make headway this year. U.S. benchmark corn futures rose for a third day on Friday to $3.8525 a bushel in Chicago. They’re up about 3 percent in 2019 after advancing 7 percent last year.

 

©2019 Bloomberg L.P.

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