Ag Market, the Farm Division of John Stewart and Associates, this week hosted its first Farm Profitability Conference, called ?It?s Profit…Not Price.? Ag Market analysts offered a more in-depth look at grain markets.
Grain traders have fixed their attention on crop acreage, value of the dollar, and trade with China. Jim McCormick, branch manager of Ag Market, believes China could ?dramatically change the dynamic of our markets.”
?The Phase One trade deal is a big deal, if China can fulfill (it). (The) Coronavirus has put a hiccup in it, but the fact of the matter is we?re dealing with a product people need. As China comes in and starts buying a lot of grain, they can change the dynamics of our markets dramatically because right now, we?re not pricing China into the market,” McCormick said.
McCormick does not anticipate big sales on February 14, when Phase One goes into effect. He says China needs to first address the Coronavirus outbreak.
“Once they get it contained, I would expect them to come in,” McCormick said. “(But) they?ve made it apparent that they?re not going to by beans from the U.S. just to buy beans. They?re going to look at it economically. With Brazilian harvest coming online, we’re not going to be competitively priced in the near-term.”
McCormick suspects China will ramp up its purchases of U.S. agricultural products in the fall.
