China has agreed to take an additional 10 million tonnes of US soyabeans as the two countries make ‘substantial’ progress on trade talks.
Futures in soybeans rose on the news. Corn futures also reacted positively, with the potential for exports of corn and products such as ethanol and distillers’ grain.
Cotton futures, another big US export, were also up after the announcement on Monday (February 25).
The two countries called a 90-day truce in the trade war last year, which saw tariffs imposed on goods on both sides.
US soybeans had been heavily affected by the trade war, with a substantial amount exported to China, impacting oilseed markets.
Agriculture Secretary Sonny Perdue confirmed on Friday (February 22) China had committed to purchasing an additional 10m tonnes of soybeans in an Oval Office meeting.
On Twitter, Mr Perdue said: “Hats off to the President for bringing China to the table.”
He said it showed their strategy was working, it was a show of good faith from the Chinese and there were also indications of more good news to come.
Also on Twitter, President Donald Trump confirmed a delay in increasing tariffs, scheduled for March 1, as the two countries continued talks.
He said the US had made substantial progress in trade talks including in agriculture.
He tweeted: “Assuming both sides make additional progress, we will be planning a summit for President Xi and myself, at Mar-a-Lago, to concludean agreement. A very good weekend for the US and China.”