Chinese Officials Report they Will Be Purchasing U.S. Soybeans Soon

China intends to announce this month the first batch of U.S. soybean purchases where most, if not all, will be destined for state reserves, according to government officials.

The final decision will be made by the State Council or cabinet, said the people, who declined to be identified as the matter is confidential. Details to be decided include whether the volume should be 5 million tons or 8 million tons and if commercial companies should buy a further 2 million tons and be reimbursed for the 25 percent tariffs, the people said.

The decision comes just over a week after U.S. President Donald Trump and Chinese counterpart Xi Jinping pledged during the G20 meeting in Argentina to resolve the trade tensions that have disrupted global commodity flows. The resumption of U.S. soybean purchases will provide some relief to American farmers who have seen exports to the world’s biggest consumer plummet and domestic inventories pile up.

Ministry of Finance officials led a meeting last week to discuss restarting American imports, the people said. It remains unclear whether the purchases will be made this month and if the shipments will be taxed first and reimbursed later, or if it will follow a cut in tariffs, they said. China’s commerce ministry and the finance ministry have not replied to faxes seeking comments.

Expectations of large U.S. soybean purchases have pressured domestic soybean meal prices, said Hou Xueling, analyst with Everbright Futures Co.

“For state reserves, the volume can be any number,” said Hou. “But not so for commercial buyers, as U.S. soybeans are not attractive while Brazil’s new crop gives good crush margins for plants.”

Soymeal contracts for May delivery on the Dalian Commodity Exchange closed at its lowest since June, 2017, on Monday. Soybean futures traded on the Chicago Board of Trade was down 0.5 percent at $9.12 per bushel.

Source: AgriMarketing

ProAg Quick Links

Agent Toolbox Grower Toolbox Careers

ProAg News

USDA Reports Review

The USDA World Agricultural Supply and Demand Estimate (WASDE) for July was met with much skepticism based on the corn numbers. With production 195 million bushels (mb) higher than in June and nearly 375 mb above the average trade estimate, the corn market sloughed off early weakness and closed sharply higher....

Helping wheat, corn producers target fertilizer needs

A few years ago, Agricultural Research Service (ARS) scientists in Akron, Colorado began noticing a pattern to their wheat harvests: yields were higher in low-lying areas. But it was the extreme variability in yields that surprised the researchers. ...

Grants help rural businesses lower energy costs

Acting Assistant to the Secretary for Rural Development Joel Baxley today encouraged farmers, rural small businesses and agricultural producers to apply for financing in a key U.S. Department of Agriculture (USDA) program that provides loan guarantees to help rural small businesses lower their energy costs....
Get ProAg updates via email
Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now