Grain markets started strong this week on news that China has agreed to purchase an additional $17 billion in US ag products. This is positive news but like most deals, the devil is in the details. Is this $17 billion price picked up at the farm or FOB Shanghai? Is there any fixed volume amount, or is it all based on dollar value? Is there a mechanism in place if they do not follow through? What have we given up in return? We may never have all the answers. While China did not follow through on their Phase 1 trade agreements, we will give them the benefit of the doubt and assume this time will be different as they have fully consummated their initial purchase of 12 MMT of soybeans. This trade deal is a matter of perspective. I have seen some feedback where analysts were ecstatic because they compared this deal to the last 12 months of Chinese purchases. Looking through that type of filter, China will buy 3X more in 2026 than what they did in 2025. What a smashing success! However, this approach takes a short term result out context, ignoring the impact from a decade…
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