China made its first major purchase of U.S. soybeans since President Trump and Chinese President Xi Jinping agreed two weeks ago to try to settle the Sino-U.S. trade dispute, reported the USDA on Thursday. However, the purchase, 1.13 million tonnes (41.5 million bushels), was too small to convince growers that China will return to its role as the biggest customer for U.S. soy exports.
Kentucky farmer Davie Stephens, president of the American Soybean Association, said China would have to remove its 25 percent tariff on U.S. soybeans for sales to continue. “Without removal of this tariff, it is improbable that sales of U.S. soybeans can be sustained.” Soybean prices are roughly $2 per bushel lower than they were before the trade war began last summer, he said.
Soybean sales to China are a trickle of their usual volume. As of Dec. 6, just 533,500 tonnes had been sold or shipped in the trade year that began on Sept. 1. By comparison, 21.5 million tonnes had been sold at the same point in 2017, according to USDA data. The new purchase would triple the sales total for this year. The USDA forecast in its monthly WASDE report that U.S. soybean exports would fall by 17 percent in 2018/19 and Brazilian exports would climb by 12 percent. China is relying on Brazil, the world’s largest soybean exporter, to replace U.S. soybeans.
Speaking for soybean growers, Stephens called on the USDA to release the second round of Trump tariff payments. An announcement on the second round was expected on Dec. 3, but it has been delayed, reportedly in hopes of a revival of sales to China. The USDA said on Wednesday that it expects to publish the payment rates for the second round by the end of this month. Agriculture Secretary Sonny Perdue told reporters that he would discuss the matter with White House officials on Friday.