CHICAGO - The U.S. Department of Agriculture on Thursday confirmed private sales to China of 68,000 tonnes of soybeans for the 2019/20 marketing year, the first such purchase by a private buyer since the trade war between the world's two largest economies broke out more than a year ago.
It was the first new soybean purchase by China since a 544,000-tonne sale was announced in late June, and the first since Beijing offered to exempt five private crushers in the country from 25-percent import tariffs on U.S. beans arriving by the end of the year.
In its weekly export sales report, the USDA also said China bought 66,800 tonnes of soybeans for 2018/19 delivery, including 62,000 tonnes that had previously been listed as headed for unknown destinations. But China also canceled previous purchases totaling 72,900 tonnes for the current marketing year, USDA said.
Widespread market rumors last week suggested that a large Chinese crusher purchased a small number of soybean cargoes for shipment in October from terminals in the U.S. Pacific Northwest, traders said.
Prices for soybeans shipped to Asia from the PNW this autumn are lower than prices for beans shipped from rival exporter Brazil if China's import tariffs are removed, U.S. export traders said.
Large purchases, however, are not expected as China's hog herd, the largest consumer of the soybean meal produced from raw beans, has been decimated by the deadly African swine fever. Soy crushing margins are also unprofitable, limiting demand.
Although just a fraction of the 87 million tonnes of soybeans the world's top buyer is expected to import over the 2019/20 (Sept/Aug) season, the purchase was significant. The 25-percent tariff on U.S. soybeans made imports from rival suppliers like Brazil and Argentina far more attractive to private crushers.
Chinese state-owned firms have purchased some 14 million tonnes of U.S. soy since an initial trade war truce was struck by U.S. President Donald Trump and Chinaâ€™s Xi Jinping in December, but less than 10 million tonnes have been shipped so far.