China Is Getting Ready to Buy More U.S. Corn After Trade Talks, Sources Say
China Is Getting Ready to Buy More U.S. Corn After Trade Talks, Sources Say
(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.
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 $3.845 a bushel in Chicago. They’re up almost 3 percent in 2019 after advancing 7 percent last year.
Chinese buyers are also starting to make inquiries to some major U.S. ethanol producers about possible purchases of the corn-based renewable fuel, according to people familiar with the matter.
Some American companies are fielding calls from buyers, in gestures seen as a precursor for potential purchases, said the people, who asked not to be named because the information is private.
To contact Bloomberg News staff for this story: Isis Almeida in Chicago at ialmeida3@bloomberg.net;Alfred Cang in Singapore at acang@bloomberg.net;Niu Shuping in Beijing at nshuping@bloomberg.net;Mario Parker in Chicago at mparker22@bloomberg.net
To contact the editors responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net, James Poole
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With assistance from Bloomberg