The new US-China trade agreement calls for China to buy $40-$50 billion worth of US agricultural commodities annually for two years. Such a large fixed dollar-figure could push soft commodity prices higher in the US if China is able to meet that pledge. That’s great news for US farmers, ag exporters, and even farm equipment suppliers. Conversely, it is bad news for packaged foods companies. This creates an opportunity for a pair trade: Long DBA and/or MOO vs Short PBJ.
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