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Trade negotiations will affect some ag prices

A market analyst says active trade negotiations could weigh on U.S. cotton and rice prices in the next few months.

“The trade deals are going to be much more important this year than prevent plant on price.”

Jody Lawrence with Strategic Trading Advisors says the U.S. cotton industry is watching for a trade deal with China.

“Anybody in southeast Asia that wants to process U.S. cotton, they’d have to repatriate that cotton and if that were to happen, you could have a massive run on July cotton and that would go over into other months.”

China recently made some larger purchases of U.S. cotton, but Lawrence says unless trade negotiations go favorably, China’s not expected to continue that high level week-to-week business.

“With China’s history, it would show they’re showing some form of weakness in the negotiation that they still have to buy from the United States, so I would expect the slow sales to continue until a trade deal can be reached.”

Lawrence says a return to a phase one trade deal type framework with China could also change the landscape of corn, soybeans and other commodity prices quickly.