By Jamie Martin
China significantly increased its U.S. soybean purchases this week, securing at least 14 cargoes in its largest single-day buy since January, Reuters’ Karl Plume reported. The purchases follow discussions between USDA administration and President Xi Jinping and signal renewed momentum in agricultural trade between the two countries.
According to Asia-based traders, China is acting to fulfill pledges made during the Busan, South Korea, summit—even though U.S. soybeans are selling at higher prices than Brazilian supplies. One trader noted, ‘This bigger round of U.S. soybean buying is no longer a goodwill gesture but a manifestation of China’s commitment to the Busan terms.’
COFCO, China’s state-owned grain trader, acquired at least 840,000 metric tons for December and January shipment. Most cargoes are scheduled to load at Gulf Coast ports, with others departing from the Pacific Northwest. Traders estimated that three-quarters of the shipments would originate from the Gulf region.
USDA data released during the government shutdown confirmed that China had already purchased 232,000 metric tons, bringing recent total commitments to nearly 1 million tons.
Asian traders say COFCO paid substantial premiums—$2.35–$2.40 per bushel from the Gulf and $2.15–$2.20 from the Pacific Northwest—far above the roughly $1.25 premium for Brazilian soybeans. One Chinese processing company trader remarked, ‘It is a political move. Chinese companies are just doing it as a commitment to buy U.S. soybeans.’
Bloomberg’s Hallie Gu said that "the purchases have reignited market optimism around the soybean trade between the two agricultural powerhouses, which was worth more than $12 billion last year and will underpin any trade agreement.”
Amid ongoing negotiations, Axios noted that Treasury Secretary Scott Bessent said the trade agreement with China is not yet complete but expressed renewed confidence in Chinese leaders. “We haven’t even finished the agreement… which we hope to have done by Thanksgiving,” he said, adding that he believes ‘China will honor their agreements.’
Photo Credit:gettyImages-dilok-klaisataporn
Categories: National