Increased new-crop sales to China have the attention of U.S. Agriculture. But as Micheal Clements shares, China needs to buy more to meet trade promises.
Clements: 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 says the analysis includes corn, soybeans, sorghum and cotton.
Nigh: 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.
Clements: Nigh says large new-crop sales kick-start exports for the new marketing year, but don’t necessarily lead to greater total exports. She says current data shows China is behind its Phase 1 commitments.
Nigh: 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.
Clements: Nigh says there are many factors that can influence trade with China.
Nigh: 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.
Clements: You can find the analysis on the Market Intel page at fb.org. Micheal Clements, Washington.