In trade war respite, China buys 2.25 million bushels of U.S. soybeans

The USDA confirmed on Monday the sale of 612,000 tonnes (2.25 million bushels) of U.S. soybeans to China, a small part of the 5 million tonnes promised to President Trump last week and much less than traders suggested over the weekend. China used to be the largest customer in the world for U.S. soybeans but retaliatory tariffs have reduced sales to one-eighth of their usual pace.

Groups representing soybean farmers generally have said little about the pledge. A marketing official for the Illinois Soybean Association told the South China Morning Post, that the announcement “is a good step forward but we’re going to reserve our enthusiasm until the contract is happening.” The newspaper, based in Hong Kong, pointed to skepticism in the futures market that a 5 million-tonne purchase would make much difference, considering U.S. soy stockpiles are swelling and China is increasingly reliant on South America.

China’s largest food processor, COFCO Group, said over the weekend that it recently bought “millions of tonnes” of U.S. soybeans. In a law triggered by mammoth Soviet wheat purchases in the 1970s, traders are required to report within one trading any sales involving more than 100,000 tonnes of grains or oilseeds.

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