"Prices got low enough to jumpstart exports early," said Chad Hart, Iowa State University economist and crops and biofuels specialist. At the same time, China expressed its intent to meet its commitments to the phase-one trade deal, which would require buying $36.5 billion of U.S. ag products in the calendar year.
While demand is expected to remain strong, all eyes are on new-crop production. On June 30, USDA said farmers planted 92.7 million acres (ma) of corn and 87.6 ma of soybeans. Both were lower than analysts had expected.
"Weather continues to support high prices. There's still fear that drought will severely impact production," ISU's Hart said.
"I do worry about a year from now," Hart stressed, adding that nothing is guaranteed the third year after the deal. "We can't expect China to keep buying at the current pace. Things should fall back to a more sustainable level. Stronger than in the past, but not like now."