January 8, 2019

China buys 180,000 tonnes of US soybean as officials seek to reduce trade tensions

China's state-owned companies have acquired at least three cargoes of US soybean - which amounted to about 180,000 tonnes - on January 7, according to two traders with knowledge about the deal.

Another trader said the total was closer to 15 cargoes, or about 900,000 tonnes.

The latest purchase would make it Chinese importers' third large soybean purchase from the US in the last month, Reuters reported. It happened as officials from both the US and China met for talks to reduce trade tensions following the establishment of a 90-day trade war truce on December 1, the traders said. The truce will expire on March 1.

The soybeans will be shipped mostly from terminals in the Pacific northwest from January to March, with a smaller volume to be exported from US Gulf coast terminals, the traders said.

As a result of US-China trade war that began last year, China had imposed a 25% duty on US soybean shipments that remains in force. Still, the country booked more than five million tonnes of US soybeans in the past month's deals, a fraction of China's typical purchases from the US which normally total more than 30 million tonnes.

Grain traders have been awaiting news of further Chinese buying, although official US confirmation of any deals has been suspended due to a partial US government shutdown.

Benchmark US soybean futures on the Chicago Board of Trade rose for a fourth straight trading session on January 6 and touched a three-week high as renewed Chinese buying offset concerns about abundant global supplies.

- Reuters