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Farmers

China Resumes Buying U.S. Soybeans at Regular Levels, Easing Trade War Tensions

Strategic Insights

— 1 min read

As part of a deal announced yesterday, Treasury Secretary Scott Bessent said that China has pledged to resume buying U.S. soybeans at regular levels, easing a trade war that has impacted Minnesota farmers. Soybeans are the state's top agricultural export, but until this week, China had not bought any American beans this year. The deal has sparked optimism among farmers, who were forced to pay for storage due to low prices, and market analysts are watching to see if prices will rise next year.

Key Takeaways:

  • China has pledged to buy 12 million metric tons of U.S. soybeans this season and 25 million metric tons each year for the next three years.
  • Soybean futures rose over 1% after the announcement, indicating market optimism about the deal.
  • Southwest Minnesota soybean farmer Bob Worth expressed caution about the deal's timing but is optimistic about future price increases.
  • The Minnesota Soybean Growers Association warned that the state's exports to China have downshifted since the 2018-2019 tariff war.
  • The deal may be too little, too late to reverse the damage done to Minnesota farmers, who had to pay for expensive storage costs.

Statistics:

  • China has pledged to buy 12 million metric tons of U.S. soybeans this season.
  • 25 million metric tons of U.S. soybeans will be bought by China each year for the next three years.
  • Soybean futures rose over 1% after the announcement.
  • Minnesota farmers had been unable to sell their soybeans to China for most of the year until this week.
  • The Minnesota Soybean Growers Association stated that the state's exports to China have downshifted since the 2018-2019 tariff war.

Sources:

  • Axios, September 25, 2023: "Minnesota farmers desperate for a China trade fix"
  • Reuters, October 29, 2023: "China buys three US soybean cargoes ahead of Trump-Xi meeting: sources"
  • Axios, October 15, 2023: "The farm bailout isn't working for many farmers"
  • Financial Times, October 30, 2023: "China to buy US soybeans amid Trump-Xi meeting"
  • Star Tribune, October 18, 2023: "Minnesota soybean farmers worry Trump's trade deal may no longer be 'that one big customer again'".

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