The Argentine Tango featuring Presidents Trump and Xi may have been a dance that neither had ever tried before. And the judges’ scores after the performance were far from a 10. Dancing with the Stars it was not.
Going into the weekend with the profitability of every Corn Belt farmer on the line, President Donald Trump issued positive and negative predictions of the potential outcome.
The grain trade was looking for any hint of something positive. The White House analysis after a Saturday night dinner meeting provided enough of a spark for the soybean market to jump 25 cents when trading resumed on Sunday night, despite early assessments that Trump and Xi were not at the same meeting.
Wire services began reports of what the two sides agreed upon with little commonality between the two.
While the White House reported China would quickly resume buying large volumes of agricultural commodities, there was nothing in the China communique resembling that until an oblique reference on Monday.
The White House did not indicate any volume, any type of commodity, or any timetable. Word in the grain trade on Monday produced expectations of as much as 180 million bushels of soybeans, but no indications of corn, ethanol or co-products.
A harbinger of Chinese intentions to resume business with U.S. farmers came last week when the U.S. Department of Agriculture reported China purchased 9,000 tons of pork to help address the issue with its swine herd declining due to African swine fever. That may do more to foster a return to doing business with U.S. farmers more than presidential trade policy.
China actually bought more pork than any other global importer, jumping from a position of absence to top position within a week.
As far as the tango performance goes, Trump and Xi have asked their minions to stand in and practice for the next 90 days and see if they can avoid stepping on each other’s feet. If that is successful to the point that the trade war ends, U.S. agriculture will have a reason to continue its support of White House trade policies into the next election.
But if Chinese orders for soybeans are not forthcoming, farmers will be hard pressed to accept an invitation to the next dance. At his address to the Illinois Farm Bureau's annual meeting in Chicago on Monday, Agriculture Secretary Sonny Perdue did all he could to excite the members about the success in Argentina.
However, that was followed by word that the USDA’s second payments to farmers for being victims in the trade war would be coming in another week. While most farmers were respectful in their applause of the reported White House success, many hallway conversations took the tone of “we’ll know it when we see it.”
Perdue did emphasize that the USDA will be working harder to create more international markets, and not rely on China as a major market.