China makes largest U.S. grain purchases since start of trade war

Jessie Higgins
China made large purchases of American corn, wheat and sorghum in the last week. File Photo by Stephen Shaver/UPI
China made large purchases of American corn, wheat and sorghum in the last week. File Photo by Stephen Shaver/UPI | License Photo

EVANSVILLE, Ind., March 24 (UPI) -- China in the last week made several large purchases of American grain, sparking hope in the farming sector that the nation intends to make good on its promise to buy billions of dollars worth of U.S. agricultural products this year, industry groups say.

"It is great to see China back in the market," said Ryan LeGrand, the president and CEO of the Washington, D.C.-based U.S. Grains Council, a trade group that represents corn, sorghum, barely, distillers grain and ethanol. "We hope it is the start of many more purchases."


Chinese buyers ordered more than 750,000 metric tons of American corn Thursday and about 1 million metric tons of sorghum earlier in the week, LeGrand said.

On Friday, the U.S. Department of Agriculture announced China also bought about 340,000 metric tons of wheat.

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These are the largest single purchases of wheat and sorghum China has made since imposing high retaliatory tariffs on U.S. farm goods in summer 2018, the groups say.

"The market has been waiting for this," said Steve Mercer, a spokesman for U.S. Wheat Associates, a trade organization for the wheat industry based in Arlington, Va. "We'll see where it goes."

Following the purchase, the price for wheat spiked from under $5 per bushel to more than $5.50, according to Chicago Mercantile Exchange figures.

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The three crops are grown across the United States.

Wheat is grown in several regions, including North Dakota, Kansas and Oklahoma, and Washington state. Sorghum is grown mostly in Kansas, with fields appearing in many other states. And corn -- America's largest crop according to USDA -- is grown across the Midwest and Great Plains.

Concern arose earlier in the year that the coronavirus pandemic in China would hamper the nation's ability to buy an agreed-to $80 billion in agricultural products over the next two years, according to phase one of the trade deal with the United States.

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In an effort to halt the virus spread, China closed businesses and quarantined individuals. Shipping ports backed up as workers stayed home.

In the last weeks, as the number of new coronavirus cases dropped in China, officials have eased travel and quarantine restrictions, and people are returning to work.

"Our team on the ground in China is kind of getting back to normal," said Jim Sutter, CEO of the U.S. Soybean Export Council, a trade group based in Chesterfield, Mo. "People there are going back to work. They are ramping up production again. Demand is pretty good in China."

China has not yet made any large purchases of American soybeans, Sutter said. That most likely is because Brazil, China's other main soybean supplier, is in the middle of its harvest. The market is flush with Brazilian soybeans, which are cheaper than American soybeans.

"We just have to wait for Brazil to sell all of its beans," Sutter said. "Then the U.S. will get our turn."

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