China purchased about 840 thsd tons of US soybeans on Friday

Chinese state buyers made one of the largest single-day purchases of US soybeans this year, buying at least 840 thsd tons for shipment in October and November. According to US traders, the purchases included eight cargoes to be loaded from Gulf Coast export terminals and six cargoes from Pacific Northwest ports.

The purchases followed China’s return to the US soybean market in late June. For most of the past year, China reduced imports from the United States due to trade tensions and the availability of cheaper Brazilian soybeans, which continue to offer a price advantage for Chinese importers.

The new deals came after recent trade negotiations between Washington and Beijing. According to the White House, China committed to purchasing around 25 mln tons of US soybeans annually while also increasing imports of other American agricultural products.

Market participants expect additional soybean purchases ahead of Chinese President Xi Jinping’s planned visit to Washington in late September for trade talks with US President Donald Trump. Traders said that recent purchases totaling more than 3 mln tons were made primarily by state-owned companies, while private importers continue to source soybeans from South America.

Meanwhile, Sinograin, China’s state grain reserve operator, has begun auctioning imported soybeans from its reserves to make room for incoming US shipments. About half of the 504 thsd tons offered at Friday’s auction were sold, and the company plans to auction another 501 thsd tons next week. Traders expect similar sales to continue in the coming weeks.

Tags: soybean, USA, China