(ZEROHEDGE) – The prospects of strong Chinese demand has pushed Chicago soybean futures prices to a seven-month high this week.
In a throwback to 2019 optimism on the U.S.-China trade deal, the Trump administration has shifted from vaccine pump headlines to trade. Bloomberg cites several sources who say after top U.S. and Chinese trade officials reaffirmed phase one trade deal commitments earlier in the week, that China is planning to purchase a record amount of soybeans.
The sources estimate total purchases could be around 40 million tons this year, an amount that would be 25% more than the levels seen in 2017.
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China has been lagging behind purchase commitments laid out in phase one trade agreement. We outlined this in a piece titled "Trade Deal" Farce Summarized In These Charts."
Bloomberg estimates that China's purchase commitments of farm goods for the first seven months of the year were at just 27% of the target value implied by the deal.
The USDA reported Tuesday that Chinese importers bought 408,000 tons of U.S. corn and 204,000 tons of U.S. soybeans. Then on Wednesday, China's agriculture ministry said soybean imports were expected to rise into the late year.