After waiting for nearly a year-and-a-half, U.S. farmers and ranchers may have received an early Christmas present. A deal in principle is in place for the phase one trade agreement between the U.S. and China. China will reportedly buy $50 billion of agricultural products. In return, the U.S. will reduce the tariff rate on Chinese products which were scheduled to take effect on Sunday. Bolt Marketing market analyst DuWayne Bosse says agriculture has been waiting for this day. “The timing makes sense with the impeachment headlines out there I can see Trump wanting the trade deal; we had the tariff deadline coming December 15 where he was going to increase tariffs on China so it felt like it was going to be now or after the elections next year.” Bosse says funds are aggressively short in the corn and soybean markets. That will make funds nervous about their short positions and Bosse feels that could bring a significant rally to the market. The value of the U.S. dollar has also gone lower, which is also positive news for agricultural exports.
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