Last week’s announcement by the White House that President Trump and China’s President Xi Jinping, had a breakthrough trade agreement in which China would boost imports of US commodities may not have been all it’s cracked up to be.
The White House said China would buy 12 million tonnes of US soybeans by the end of this year and 25 million tonnes annually through 2028. More imports of sorghum, hardwood logs and other commodities also were included as retaliatory tariffs on US beef, pork, dairy, wheat, corn, cotton and other agricultural products were to be lifted.
But there was confusion about whether China would buy an additional 12 million tonnes or if it were 12 million in total, according to an article in the Farm Journal’s PORK.
CLEARING THE AIR – SORT OF
The PORK story said a White House fact sheet said “China will purchase at least 12 million metric tons of US soybeans during the last two months of 20225 and also purchase at least 25 MMT of US soybeans in each of 2026, 2027 and 2028. Additionally, China will resume purchases of US sorghum and hardwood logs.”
However, South American soybeans are cheaper than US beans, an analyst said. So Chinese purchases of US beans would just be living up to an agreement, and China has been known to renege. And a paper by Scott Lincicome, of the CATO Institute said there were deeper complications.
“For starters, the deal at its best amounts to a temporary reprieve from the most intense bilateral hostilities while offering little long-term relief for US companies, farmers and workers caught in the middle of the ongoing trade wars,” the CATO Institute said. “For example, China’s agreed purchases of American soybeans should help US farmers over the next few years but, given that soybean exports to China were effectively at zero in 2025, that’s a really low bar.”
And if the soybean purchases actually happen, China’s purchases still would be below levels seen before bilateral hostilities this year and far below where they were before President Trump’s first-term tariffs. And in the meantime, China has turned to other world suppliers, notably Brazil, leaving US farmers out.
And a Wall Street Journal article said the US-China deal doesn’t guarantee promised volumes unless the price comes down since it includes a loophole that said China will make such purchases based on “market prices.”
So, what can be said? It seems the trade deal will do little to help US export interests to China, the world’s biggest market, the market analyst said. It has been said before: Don’t believe what China says. Only believe what Chia does.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $234.59 per cwt to $238.48, compared with last week’s range of $236.75 to $249.43 per cwt. FOB dressed steers and heifers went for $366.32 per cwt to $373.39, compared with $373.28 to $378.93.
The USDA choice cutout Thursday was down $0.29 per cwt at $377.97 while select was up $0.51 at $360.76. The choice/select spread narrowed to $17.21 from $18.01 with 111 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $403.89 per cwt, and 50% beef was $182.87.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.05 to $1.20 a bushel over the Dec corn contract, which settled at $4.28 3/4, down $0.06 1/2.
The CME Feeder Cattle Index for the seven days ended Wednesday was $347.82 per cwt, down $1.60. This compares with Thursday’s Nov contract settlement of $322.05, down $3.67.