China and Soybean Trade
From the Ag Information Network, I’m Bob Larson. Agricultural trade has been rough in recent months with tariffs and other barriers impacting exports.
Tanner Ehmke, lead economist for grains and oilseeds at CoBank, says a lot of speculation revolves around what the future trade relationship between China and the U.S. will look like …
EHMKE … “We've obviously been wondering about what this relationship looks like, going forward, between the U.S. and China. Since we had a trade truce – we call it a trade truce because we can't really call it an agreement. We haven't seen anything signed. There are no trade documents formalizing anything whatsoever that we can confirm. So, as a result, we just kind of have to go off of what we're hearing and seeing from the marketplace. China is back in the market buying soybeans from the U.S. after having been absent for several months.”
With a slowing economy and pork consumption down, Ehmke says there are some market fundamentals in China that may impact soy demand in the short term …
EHMKE … “They have an oversupply of hogs, and they are shrinking their hog herd, and so that's going to be impacting their crush margins, or the demand for soybean meal. And so, crush margins in China right now are negative. That's not a signal that we want to see. If we're going to be bullish on exports to China, we need that to reverse.
We're gotta have the private Chinese crushers buy.”
Again, that’s Tanner Ehmke of CoBank.
