Chinese Issues ‘Stern Warning’ Over Taiwan

China has launched military drills in the waters and airspace around Taiwan. Beijing is calling it a ‘stern warning’ against outside interference in Chinese affairs. This move follows the Trump Administration’s $11 billion sale of weapons to Taiwan. If China tries to seize Taiwan by force, Japan said its military could intervene. Over the weekend, A Russian government official said Moscow would back China if that happened. The impact on the grain markets remains a wildcard. China is fulfilling its 12-million-ton soybean purchase obligation with the United States. However, there is always the threat of Chinese retaliation if the U.S. supports Taiwan. Military action or a blockade also has the potential of disrupting U.S. grain shipments to Asia.