China is getting ready to buy more US corn after trade talks, sources say

Chicago

China’s state grain buyer is preparing to snap up more US corn in anticipation of a trade deal between the two countries, according to people familiar with the matter.

Sinograin was in the market agreeing contract terms for potential purchases on Thursday so it could act quickly in the event of an agreement being reached during talks in Washington, the people said, asking not to be identified because the matter is confidential.

The deals would dovetail with a proposal by Beijing to buy an additional $30 billion a year of US agricultural products including corn, soybeans and wheat as part of a possible agreement. President Donald Trump, who will meet with China’s top trade negotiator Friday afternoon in Washington, said this week that talks involved Beijing buying “a lot” of corn.

A Sinograin spokesman declined to comment.

US farmers have been at the centre of Trump’s trade war after Beijing last year slapped tariffs on a range of American agricultural products. China has repeatedly offered to increase purchases to shrink the US trade deficit and end the spat.

It has returned to the US market for soybeans in recent months amid a temporary truce between the nations, but traders have been waiting for it to be extended to other products, especially corn.

Additional purchases would boost prices that have struggled to make headway this year. US benchmark corn futures rose for a third day on Friday to $3.8525 a bushel in Chicago. They’re up about 3 per cent in 2019 after advancing 7 per cent last year.