WASHINGTON, D.C. (RFD NEWS) — Agricultural markets continue to monitor China’s purchases of U.S. farm products, as traders look for signs the country will continue meeting its trade commitments.
Greg McBride, an economist with Allendale, says China’s buying activity has generally matched what officials have indicated they would do, helping support confidence in the market.
McBride says maintaining a steady pace of purchases will be critical. He warns that if China falls behind its commitments, traders could quickly lose confidence and begin questioning whether the buying will continue.
He adds that any slowdown could also shift attention back to broader geopolitical issues that have the potential to influence trade relations between the two countries.
“Overall, doing what they’ve said they were going to do; we need, obviously, that consistently to continue,” McBride said. “Otherwise, the market will start to fade away at this because if they don’t keep up a certain pace, the market’s going to say, ‘well, they’re not doing what they say,’ and then we start to talk about some of the other reasons why things are not being done. Whether that’s the conversation about them helping Iran with rockets or shoulder-launch rockets.”
Markets will also be watching next month, when Chinese President Xi Jinping is expected to visit the White House. Analysts say the meeting could provide additional insight into the direction of U.S.-China trade relations and future agricultural purchases.
