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President Donald Trump touted the trade cease-fire he signed with China last month as a "momentous step," but it didn't lift commodity prices.

U.S. pork and soybeans, the two farm goods most likely to benefit from China's commitment to purchase $32 billion in farm products over the next two years, are both down over the past two weeks. Corn prices, which don't have as direct a connection to the Chinese market, are flat.

The spread of corona­virus that originated in the Chinese megacity of Wuhan has roiled markets worldwide, suppressing the upside from the trade peace. Even before that surprise damper on prices, there was skepticism that China will follow through on its end of the deal and concern that continued tariffs on U.S. exports to China will prolong farmers' struggles.

Meanwhile, a global oversupply of grain persists and is likely to grow in coming weeks with signs pointing to a good crop in Brazil, the No. 2 food producer in the Western Hemisphere and already a larger exporter of soybeans to China than the U.S.

"China hasn't been doing anything. Wheat was down last week because China was buying wheat from three or four countries but not the U.S.," said Mark Mason, a broker at Kluis Commodity Advisors in Wayzata. "They're supposed to start making purchases in 30 days, and the worry is, can they do that when they're focused on the coronavirus."

The pork market, which spiked in May but since fell back below pre-trade war levels, will just have to see more convincing evidence of Chinese demand before prices rise, said David Preis­ler, executive director of the Minnesota Pork Producers. A market-weight hog was fetching roughly $130 on Friday — about $35 less than it was before the trade war started.

"Until it's on the ship and cleared customs in China, it's probably not going to affect the marketplace," Preisler said. "We need to physically see that we're increasing exports. That, in turn, should have an effect on price."

Soybean growers in Minnesota, many of whom have been growing their crop specifically for export to China, were hit especially hard by the trade war and received the biggest checks from the government to help them weather the tariffs. On the surface, China's commitment to double U.S. farm imports should have lifted prices. Instead, soybeans are down 54 cents since the trade deal was signed, to $8.75 per bushel.

Prices for soybeans have been affected by China's 2019 outbreak of swine fever — which killed as many as half of that nation's pigs — at least as much as by the trade war, said Preston Caldwell, a Morningstar equity analyst who specializes in Chinese economics. The fatal hog illness has also spread to Vietnam and several other East Asian countries.

"I wouldn't expect the unwinding of the trade war to have a major impact" on prices, Caldwell said.

Morningstar's ag experts also don't believe China will meet its quotas for U.S. imports.

"Even if the targets were met, it would represent less than a 10% gross boost to total U.S. agricultural exports of about $150 billion," Caldwell said. "The net boost would very likely be an order of magnitude smaller, as higher exports to China will largely represent a redirection of exports that would've gone to other countries."

Perhaps the biggest problem for farmers, one that won't go away soon, is an oversupply of grain — and competition from farmers in other parts of the world.

Despite a poor growing year for U.S. farmers in 2019, Brazil's crop is looking excellent, said Rick Erickson, risk manager for Goodhue-based Ag Partners, which operates several grain elevators in southeast Minnesota and southwest Wisconsin.

"There's many factors at work, but the No. 1 thing is we have ample supplies of commodities in the world — corn and soybeans," Erickson said.

South American farmers aren't as choosy as North American farmers about when they sell their grain — and at what price, he said. They'll price the grain at whatever level will move it quickly, while U.S. farmers store their grain and wait for a better price.

Erickson said it's not all gloomy, however.

"Some of the prices are higher than they were a year ago," Erickson said. "They're just not as high as we'd like."

A final factor limiting the effects of the trade deal on prices is that China did not promise to lift its tariffs — which will be a long-term drag on pork, soybeans and other U.S. commodities.

"Without the tariffs coming off," said Preisler, "it still puts us at a competitive disadvantage."

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