Chinese officials on Wednesday reiterated positive signs coming out of the talks between the U.S. and China, but Chinese leaders provided few details in official statements about those talks. Still, a report out of China indicated “Chinese officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas,” according to Bloomberg News.
The statements, according to Bloomberg, came from “two officials with knowledge of the discussions,” though China’s Ministry of Commerce did not confirm the report.
President Donald Trump had issued statements last weekend that China had agreed to “immediately” start buying agricultural products again, but China’s official responses have been more toned down with no specific details.
President Trump quoted the Bloomberg report with statements early Wednesday on Twitter, “China officially echoed President Donald Trump’s optimism over bilateral trade talks. Chinese officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas, the first sign confirming the claims of President Donald Trump and the White House that …,” the president tweeted, adding, “… China had agreed to start “immediately buying U.S. products.” @business.
The president added in a third tweet: “Very strong signals being sent by China once they returned home from their long trip, including stops, from Argentina. Not to sound naive or anything, but I believe President Xi meant every word of what he said at our long and hopefully historic meeting. ALL subjects discussed!”
Agriculture Secretary Sonny Perdue, speaking Monday at the DTN Ag Summit, said China will likely have to be back in the U.S. soybean market around the first of the year, because of need for oilseeds. China will have drained Brazil of old-crop soybeans, and Perdue said USDA analysts think China will have to buy from the U.S. before Brazil’s new-crop is ready to export.
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“We’re waiting to flesh that out and determine exactly what numbers and see the ships loading,” Perdue told the DTN Ag Summit audience.
Perdue later added: “Based on worldwide supply and demand, they have pretty much expended the Brazilian crop and we don’t think there’s enough soybean supply in South America to tide them over until the new crop in South America. So we think they have got to come back into the United States market, and this announcement in Argentina will facilitate that more quickly.
U.S. soybeans have faced 25% retaliatory tariffs since last summer that have largely halted exports to China, leaving farmers and grain elevators to store more soybeans that are typically railed or shipped directly to export.
Chinese imports of U.S. soybeans are just 2.2% of the volume sold to China over the same period last year. While other countries have boosted their imports of U.S. soybeans, exports are still down nearly 45% overall compared to a year ago.
There has been a lot of commentary from major oilseed marketers that China was trying to ride out the end of the old Brazilian crop and wait for early-harvest soybeans from Brazil rather than turning to the U.S. markets.
Bloomberg also cited that China also bought no liquefied natural gas from the U.S. in October after China imposed a 10% tariff a month earlier on U.S. liquefied natural gas.
Stock markets fell dramatically on Tuesday because of uncertainty over the trade talks between the U.S. and China with the Dow Jones Industrial Average falling 799 points, or 3.1%, on Tuesday; however, the DJIA was ticking upward in early trade Wednesday. Trump had taken to Twitter on Tuesday and called himself a “Tariff Man,” citing he would raise tariffs again on China if policies do not change.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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