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China purchases provide bullish signal for agriculture

A market analyst says China’s purchases of U.S. ag goods have been supportive to prices, but there’s still work to be done.   

Dan Basse, is the president of AgResource Company. “China still has about 10 million metric tons beans, which we would estimate somewhere in the vicinity of $5 or $6 billion and something in the area of about $10 billion remaining of additional ag products.”

He tells Brownfield if the country meets it’s $17 billion requirement by the end of the year, that could help boost commodity prices. “This is really bullish for American agriculture. We’re getting back to where China is again buying $28 to $30 billion value of ag goods annually. That’s very supportive of the demand side.”

Basse says it’s still not clear how much China will buy of corn, wheat, sorghum and cotton. “This would equal to about $1.2 billion per week. It’s a pretty heavy lift.”

He said the recent meeting between the two countries didn’t result in any new demand for U.S. producers.

Dan Basse: