China buys at least 1 million tonnes of US soybeans after trade war talks
- The purchases are slated for shipment between April and July, three traders with knowledge of the deals said
- Purchases may have been as high as 2.2 million tonnes, one of the traders said
Chinese state-owned firms bought at least 1 million tonnes of US soybeans on Friday, a day after high-level bilateral talks yielded progress towards a trade deal and a Chinese commitment to buy more US soybeans.
The purchases are slated for shipment between April and July, with a large share expected from US gulf coast export terminals, three traders with knowledge of the deals said.
One trader with direct knowledge of the deals said that total purchases were around 2.2 million tonnes. The other two traders said the sales were similar to three recent waves of buying in which state-owned firms booked 1 million to 1.5 million tonnes of soybeans.
US soybean futures rallied to multi-month highs on Friday on news of renewed demand from the world’s top importer.
But the market’s gains were restrained by worries that Chinese purchases will hardly dent the massive soybean stockpiles in the United States and around the world. The looming harvest of a large soy crop in Brazil, the world’s top supplier, further capped prices.
“It certainly is good to see some concessions and more buying interest from China, but this is a concession in terms of a larger trade agreement. Brazilian offers are cheaper than we are so it’s just part of the negotiation,” said Terry Linn, analyst with Chicago-based brokerage Linn & Associates.