Grains tumbled in Chicago after the presidential summit in Washington offered few immediate details on the United States-China trade agreements that markets had been primed for.
Commodities markets are looking for specifics on trade in agriculture and energy between the two powers, including Chinese purchases of US crops and natural gas. So far, details haven’t materialized, leaving traders awaiting further statements from Washington and Beijing.
US President Donald Trump is hosting his Chinese counterpart Xi Jinping for a state visit, which was capped by dinner at the White House on Thursday. Earlier in the day, Trump said the two leaders had made ‘tremendous strides’ on expanding access to the Chinese market for US farmers under the newly-created Board of Trade. But some found the lack of new information disappointing.
‘It is not great for the farmers and bulls who were looking for additional grain and oilseed purchase announcements,’ said Joe Davis, a director of commodity sales at Futures International LLC.
The US and China have discussed cutting tariffs on certain goods. Traders expect more Chinese purchases from the US if duties on energy products like gas, and crops such as soybeans, corn and wheat, are removed.
Soybeans in Chicago declined as much as 1 percent, extending losses to a fourth day in the longest losing streak since June. Corn and wheat both fell to one-month lows, dropping as much as 1.8 percent and 2.5 percent, respectively. In Kuala Lumpur, palm oil futures slid as much as 2.2 percent, tracking weakness in US soyoil markets.
The lack of fresh news led Chicago soybean futures to waver, with some investors ‘selling on the apathy,’ AgResource Co. wrote in a note.
Chinese state-owned buyers have stepped up purchases of US soybeans, and are over halfway toward Beijing’s target to import 25 million tons annually, a pledge that runs through 2028. But progress on a wider goal to buy at least $17 billion of US agricultural products has been slower.
US Treasury Secretary Scott Bessent told Fox News just before the summit that China had been ‘very fulsome’ in fulfilling its soybean pledge, but was ‘a little behind schedule’ on the broader commitment. Bessent also announced a two-month extension to the trade truce between the two countries.
The American Soybean Association said in a statement it hopes further progress can be made. ‘Soybean farmers want to see this momentum continue with strong purchases of US soy and a lasting trade partnership with China,’ said President Scott Metzger.
In the energy sector, traders have been anticipating that China could scrap its 15% tariff on US liquefied natural gas. For Beijing, LNG is seen as a relatively minor concession and a useful one, with traffic still constrained around the Persian Gulf and one of China’s largest suppliers, Qatar, all but cut off.
For the Trump administration, it would be an obvious win, given that LNG contracts typically span decades, at a time when US producers are expanding and in need of fresh commitments.