NASHVILLE, TENN. (RFD-TV) — Several Memorandums of Understanding (MOUs) have been signed this year between the United States and its global trade partners. One wheat group tells us it is a good example of policy becoming reality, pointing to the deal earlier this year with Bangladesh.
“That signed a 700,000-ton commitment to buy U.S. wheat,” Dalton Henry, with U.S. Wheat Associates, told RFD-TV News on Wednesday. “They’ve now purchased two-thirds of that already. Nobody thought that business was going to happen when they just saw that MOU, but it is happening. So, I think as we see more of those agreements followed through on, and especially with regards to the China agreement, when we see purchases that then line up with those commitments, I think people are going to get more optimistic as time goes on.”
Bangladesh has also stepped in as a new buyer of U.S. soybeans. Their imports have doubled in recent months, with Bangladesh crushers taking advantage of cheaper prices and higher seed quality. Grain purchases from countries like Bangladesh have picked up as China works to fulfill commitments made during President Trump’s October visit to Asia.
As we continue our coverage of China’s presence in the U.S. markets, numbers out this week show they made another overnight soybean purchase. One trader tells us there is more to see here than meets the eye.
“They are not bad traders; they are not buying beans at these price levels,” explained Brian Hoops, President of Midwest Market Solutions. “They actually probably bought futures contracts prior to meeting with President Trump in the middle of October. So that’s when they were actually buying and booking these products. They were buying futures. Now they’re selling the futures, putting a little pressure on the markets, but announcing their cash sales. So that’s how this market works. That’s how these work -- the countries are going to book it at cheaper price levels, which they did, and then they’re going to announce the sales at a later date. So don’t react to this as it’s a bullish new development. It’s already been in the marketplace.”
The USDA’s Foreign Agricultural Service this week reported that China has signed on to two separate U.S. bean purchases, totaling 1.2 million metric tons. Those beans are set to leave U.S. ports sometime in the current marketing year.
