International Agriculture News

China buys at least 30 cargoes of US soybeans

Chinese state-owned buyers are rumoured to have bought up to 30 cargoes of US soybeans, according to three market sources, demonstrating a thaw in trade relations between the US and China.

The cargoes were rumoured to have been bought by state-owned companies Sinograin and Cofco, with loading in January, February and March, with the majority off the Pacific Northwest ports.

“We hear about 2 million mt [has been bought],” said one market source, saying the rumoured price was 130 cents per bushel over March futures on a CFR China basis.

“CIF is rallying. Margins are widening. Seems some PNW beans trading,” said a second market source, identifying the sellers as Cargill, Louis Dreyfus and Marubeni and “possibly CHS and ADM”.

“There is talk Sinograin and Cofco bought 30 cargoes of US beans overnight from Cargill, Dreyfus, and Marubeni for loading in January through March, mostly off the Pacific Northwest,” said a third source.

One source close to the transaction confirmed that there were more than a dozen that were contracted late Tuesday, early Wednesday, while two other sources in China and in the US said there were 30 from PNW and a further 10 from the US Gulf.

There was also talk that a further 40 would be contracted this week, taking the total to just under 5 million mt.

None of the companies themselves were willing to confirm any of the deals, but several sources in China said that cargoes loading in PNW were being offered at the same price of 130 cents per bushel over March futures on Tuesday and Wednesday.

Each cargo is about 60,000 mt.

That price nets back to a 30 cent per bushel premium over futures on an FOB basis – around 5 cents higher than where it was offered on Tuesday.

The purchases, if true, will show up next Thursday in net export sales figures published by the USDA, and will represent the first time since July that Chinese companies have purchased US soybeans.

Soybean futures have traded higher all day as the market speculated that buying had returned after President Trump told Reuters in an interview late Tuesday that China was buying soybeans in “tremendous amounts”.