Chicago grains, oilseeds extend rally on China's $17 billion purchase commitment
- Wheat climbed 0.7% to $6.69 a bushel
BEIJING: Chicago grains and oilseeds futures continued to climb on Tuesday as market participants welcomed China’s commitment to purchase $17 billion in US farm goods over the next three years, including grains, beef and poultry.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.12% at $12.14-1/2 a bushel by 0255 GMT.
Wheat climbed 0.7% to $6.69 a bushel.
Corn rose 0.3% to $4.78-1/2 a bushel.
China has committed to buying at least $17 billion of US agricultural products annually in addition to soybeans for three years, the White House said on Sunday after the leaders of the two countries met in Beijing last week.
The pledge would take China’s total US farm imports close to $28 billion to $30 billion a year, traders and analysts said, below a peak of $38 billion in 2022 but sharply above last year’s figure of $8 billion and $24 billion in 2024.
“Although US farm exports to China still face an additional 10% levy, market watchers are optimistic about the purchase agreement and expect the Chinese government to lift the levy soon,” said a Beijing-based analyst who asked not to be named.
China resumed purchases of some US farm goods after an October meeting, fulfilling a US-stated commitment to buy 12 million metric tons of soybeans by the end of February.
It has also purchased some US wheat cargoes and large volumes of sorghum.
On Monday, the USDA reported soybean inspections of 483,881 metric tons for the week ended May 14.
The agency also reported corn inspections of 1,378,770 metric tons for the period.
Rain forecasts in the US Southern Plains were expected to come too late to aid the parched US winter wheat crop, according to analysts.
Drought in the US Plains wheat belt has severely damaged crop production potential this season, with 71% of the winter crop under moderate drought or worse, according to government data.
Just 23% of last year’s crop was affected by drought at this point in the season.
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