Chinese importers have signed an agreement to buy agricultural products from the US, but the market sees it as a political show

A delegation of Chinese importers during their visit to the United States signed agreements of intent to purchase more than $1 billion of American agricultural products, which became the first mass signing between the countries since 2017, and is apparently a political "step forward" ahead of the planned negotiations between the United States and China.

Chinese Foreign Minister Wang Yi will arrive in the US on October 26 for a 3-day visit, during which he will discuss a number of issues with US Secretary of State Anthony Blinken and US National Security Advisor Jake Sullivan, including the war in Ukraine, the conflict between Israel and Hamas. And in three weeks, the Asia-Pacific Economic Cooperation summit will be held in San Francisco, where US President Joe Biden and Chinese leader Xi Jinping can meet.

It will be recalled that during the period of Trump's rule, China signed agreements on the intention to purchase agricultural products from the United States for $30-40 billion, but did not fulfill them, as a "trade war" began between the countries at that time.

The new agreements have been signed with major international trading companies ADM, Bunge and Cargill as "framework contracts" of intent to purchase non-binding US corn, sorghum and wheat.

We will remind that this year China significantly reduced the purchase of grain and oil crops from the USA, as it significantly increased imports from Brazil, which harvested high crops of soybeans and corn. According to the USDA, as of October 19, China's purchases of American soybeans decreased by 39% compared to the same period in 2022, and corn by 73%.

However, the market did not react yesterday to the news of a possible increase in export sales, and quotations for soybeans and corn in Chicago even slightly decreased.