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Jim Sutter, CEO of the US Soybean Export Council, said that global soybean demand has recently strengthened with new crop sales at record levels.
The US Department of Agriculture said on Tuesday that US soybean futures prices had reached their highest level since 2018, with Chinese buyers buying the largest daily 664,000 tonnes since July 22.
“It sounds like a demand for outlook for the next six months or so is great, and so I’d say that American farmers were feeling a lot more optimistic than they were a year or six months ago,” said Sutter Asia “on Thursday” told CNBC’s “Street Signs”.
He argued that China has indicated the abolition of US soybeans is a successful one-stage trade deal between the two countries.
According to the agreement reached in January, China is committed to purchasing US $ 12.5 billion of US agricultural goods in 2020 and another $ 19.5 billion in 2021. China is the world’s largest importer of soybeans, importing 60% of the world’s soybean exports.
“I believe the phase one agreement is very important and being executed well,” Sutter said.
While there are concerns that China may not be able to meet its commitments in a phase one deal, he explained that this is largely due to the perception that the purchase will close soon after the deal is struck.
However, issues and details had to be worked through and China is now actively purchasing soybeans this time of year on seasonal demand, Sutter said.
He said that the country’s soybean demand is likely to increase as the country’s hog herd numbers will overcome the outbreak of African swine fever.
“Now, as we come to the time of year, when China is buying soybeans from the Northern Hemisphere more generally – the United States in particular – we are seeing them making significant purchases … We have new crops. There is a record volume of sales open to China at the moment, so we are thinking this is a successful trade deal.