Free Trial
USDCAD TECHS

Finds Support At The 20-Day EMA

US

Late Corporate Credit Update

US TSYS

Late Eurodollar/SOFR/Treasury Option Roundup

AUDUSD TECHS

Bear Flag

US TSY OPTIONS

BLOCK, 10Y Midcurve Ratio Call Spd

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
By Brooke Migdon
     WASHINGTON (MNI) - American farmers are cautiously optimistic that the
United States' Phase One trade agreement with China will revitalize the
agricultural economy despite the increasing likelihood that China will fail to
meet its purchase targets this year amid the coronavirus outbreak,
representatives of the American Farm Bureau Federation and its affiliates told
MNI.
     With the U.S. planting season still a few months away for most states,
farmers are holding off on recalibrating their intended crop yields, agriculture
sector sources said.
     "Before we get too carried away worrying about whether or not they can meet
the commitments, we need to give this time to play out," American Farm Bureau
Federation Executive Vice President Dale Moore said Tuesday, adding that U.S.
farmers are "very positive about the future."
     The U.S. agriculture industry took a hit last year as U.S. President Donald
Trump's trade war with China yielded higher production and consumer costs, but
China's commitment to buy USD40 billion to USD50 billion in farm goods over the
next two years has U.S. farmers refusing to let the spread of coronavirus dampen
their positive prospects for the year.
     The newest strain of coronavirus that has infected tens of thousands
globally and killed more than 600 as of late Friday, according to media reports,
has also curbed consumption and potentially hinders China's ability to meet its
total USD200 billion purchase goal outlined in the Phase One accord.
     But the long-term economic impact of the coronavirus could be "overblown,"
said Mark Tuttle, a director of the Illinois Farm Bureau.
     "This just happens to be something we don't know much about," he said. "But
we know we're going to sell our crop. The virus is going to postpone some
decision making, but we'll get through it."
     Tuttle said the coronavirus is not a major concern right now for most U.S.
farmers. However in years past overproduction has led to falling market value
and financial strain, especially for soybeans, for which China has historically
been a major export destination. 
     White House economic advisor Larry Kudlow said Friday that Chinese
President Xi Jinping told Trump in a phone call earlier that morning that the
coronavirus could delay China's purchase of U.S. goods, but that it would only
be a temporary setback.
     U.S. Agriculture Secretary Sonny Perdue told reporters Wednesday that he
was not aware of any current requests from China asking for "flexibility" in
meeting its purchase targets, but he would not be surprised if such a request
was made as the country's near-term economic outlook is presently unknown.
     "We would be asking the same thing," he said. "We don't know when this
coronavirus will be corralled, we don't know how long it'll go on."
     Perdue said USDA is hopeful that an effective cure for the virus will be
developed by the end of the year, if not sooner.
--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,M$U$$$,MT$$$$,MX$$$$,MGQ$$$,MGU$$$]

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.