China orders up to 2 million tons of U.S. soy, council says

 
The soybean market may have just gotten what it’s been waiting for: signs of larger purchases of U.S. supplies from China.
 
Chinese importers have purchased 1.5 million to 2 million metric tons of American soy over the past 24 hours, the U.S. Soybean Export Council said, citing industry sources. The shipments are expected to occur sometime during the first quarter, Jim Sutter, chief executive officer of the council, confirmed by phone and email. Most of the supplies will be shipped from terminals in the Pacific Northwest.
 
The council “is encouraged by the news that buyers from China have made purchases of U.S. soybeans,” the group said in an email. “This is obviously positive news for our growers.”
 
China is making its first significant purchase of U.S. soy since the two countries began a series of tit-for-tat tariffs this year. Soybean futures had stayed relatively quiet in the last few days as traders awaited confirmation deals were happening after President Donald Trump hailed a breakthrough on agriculture as part of the trade truce agreed in his meeting with Chinese counterpart Xi Jinping earlier this month.
 
It’s hard to overstate how important China is for the soybean world. It’s the biggest consumer by far, using the oilseed as a protein in livestock feed. Chinese tariffs on U.S. shipments have turned usual trade flows on their head. Major exporters like Argentina have been buying dirt-cheap U.S. supplies, while domestic premiums in soy king Brazil surged earlier this year.
 
Eyes on Soybeans
As the tariffs ratcheted up between the countries this year, soybeans became the poster child of the trade dispute. China started shunning U.S. supplies and Chicago futures tumbled as a result. Across the Midwest, the 2018 harvest had been piling up, unsold, in silos, bins and bags.
 
Still, the three-month nature of the purchase agreements may concern some traders. Cargill Inc. said earlier this month that the U.S. has probably already missed the best chance to sell beans to China because of the approaching South American harvests.
 
Source: Bloomberg