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China bought U.S. soybeans for the first time in six months
after U.S. President Donald Trump and his Chinese counterpart Xi
Jinping met on Dec. 1 and set a 90-day negotiating window to
resolve their trade differences.
(GRAPHIC: U.S. soybean sales to China dry up in trade war -
https://tmsnrt.rs/2QT8Qlu)
More than 2 million tonnes of additional purchases are likely
before the Christmas holiday on Dec. 25, according to one of the
sources, bringing total U.S. sales to China to more than 5
million tonnes in December.
Chinese importers bought only around 4 million tonnes of U.S.
soybeans last December, according to U.S. Department of
Agriculture data, but season-to-date sales coming into the month
last year were 40 times greater at 20.6 million tonnes, compared
to about 515,000 tonnes at the beginning of this month.
If China follows through on all the expected buying, total sales
would still be less than a quarter of what they were in late
December last year.
Soybean future prices have been falling as the purchases so far
pale in comparison to the more than 31 million tonnes, or nearly
60 percent of all U.S. soybean exports, sold to China for $12.25
billion last year.
Traders are eyeing record U.S. soybean stockpiles and the
looming harvest of what is expected to be the largest-ever crop
in top global exporter Brazil in coming weeks.
"The window is closing rapidly. Even if we get another 2 million
tonnes by Christmas, it's peanuts in the big pot," said Terry
Reilly, senior commodities analyst with Futures International.
Benchmark Chicago Board of Trade January soybean futures scaled
to $9.28 a bushel, the highest since midsummer, after Reuters
reported state-run Chinese companies had bought more than 1.5
million tonnes of U.S. soybeans on Dec. 12. Prices have fallen
more than 3 percent since then, barely above levels before the
Trump-Xi meeting.
In its weekly export sales report, the U.S. Department of
Agriculture on Thursday confirmed a net 1.561 million tonnes in
U.S. soybean sales to China last week. The agency, via its daily
reporting system, cited private sales of another 1.403 million
tonnes to China this week, along with 257,000 tonnes to
undisclosed buyers, which are often Chinese importers.
Separately on Thursday, China's state-run Sinograin confirmed
recent purchases of a few batches of U.S. soybeans, without
specifying volumes.
The purchases have been seen as a goodwill gesture before the
next round of U.S.-China talks. The United States has a long
list of complaints against China on intellectual property,
forced technology transfers and industrial subsidies.
China in July imposed a 25 percent tariff on imports of American
soybeans in response to U.S. tariffs on Chinese goods. It
remains in place as the two countries negotiate to resolve their
trade dispute by a March 2 deadline.
(Reporting by Karl Plume, Hallie Gu and Tony Munroe; editing by
David Evans, Richard Chang and James Dalgleish)
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