Details are emerging about agricultural tariff reductions under the U.S.-China trade framework. Washington analyst Jim Wiesemeyer said China’s list includes corn, sorghum, wheat, rice, cotton, meat, dairy and ethanol expected to eventually receive a ten percent tariff reduction. “Many in the ag world want instant gratification too often,” Wiesemeyer said. “When you deal with countries like China and the United States, that frequently does not happen.” Additional Chinese purchases of U.S. corn could have a significant market impact. “If China purchases any U.S. corn, and I think they will, look at your stocks-to-use ratio for corn. It’s already pretty low and it’s going to go lower.” Wiesemeyer said that could eventually strengthen basis levels and corn prices, but cautioned the market response would take time. Wiesemeyer said soybeans appear to be treated separately because of China’s commitment to purchase at least 25 million metric tons of U.S. soybeans annually. He said keeping soybeans outside the broader tariff framework could allow Beijing to maintain greater control over the timing of purchases.
