On Tuesday morning USDA announced the sale of 132,000 metric tons of new crop soybeans for delivery to China. That welcomed market news followed an overnight market meltdown following White House advisor Peter Navarro’s comments that the trade deal with China was over.
First thing this morning, Navarro spoke with the Wall Street Journal to clarify, saying his comments had “nothing at all to do with the Phase One trade deal which continues in place.”
According to Pro Farmer Washington Policy analyst, Jim Wiesemeyer, the market reaction and quick clarification confirm both the necessary trading relationship between the U.S. and China, and the market’s desire for Phase One to be completed.
“You saw the market reaction because the consensus was that the Phase One was ongoing, but you saw the market revolt on that you had the Dow futures down almost 400 points and you saw energy prices plunge and then they came back,” he said on Farm Journal Live on Tuesday. “We are in a U.S. and China centric world now.”
President Trump can talk about having an option to decouple, but in practicality that's almost impossible, he said.
“If it is, then you're going to have those market implications that you saw under the errant comments by Peter Navarro,” he said adding “I think other officials will be very sensitive now.”
Tune in to AgriTalk Wednesday morning to listen to Chip Flory interview U.S. Trade Representative Bob Lighthizer.