Soybean traders were underwhelmed by news of China’s first purchases of U.S. cargo this season, as they await details from a highly anticipated agreement between Beijing and Washington.
The purchase of at least two cargoes of U.S. soybeans that’s said to be slated for delivery later this year could mark a revival of flows between the two nations.
But the relatively small volume isn’t a game-changer, according to Illinois grower John Bartman. The handful of cargoes would be a drop in the bucket for a trade that was worth more than $12 billion last year.
“It would be great if we had an agreement but we don’t have an agreement, and that’s the problem,” he said. “You can see it in the market today.”
Soybean futures were down 0.2% at $10.935 per bushel as of 9:21 a.m. in Chicago. Future prices have been rallying in the weeks leading up to the Trump-Xi meeting, however, they surged more than 8% since Oct. 15 to the highest in more than a year.
Traders may be pausing as U.S. President Donald Trump and his Chinese counterpart Xi Jinping are expected to sign off on terms of a framework struck by trade negotiators when they meet in person in South Korea on Thursday.
“The news is no doubt positive, but the markets will be waiting to see what are the details of the agreement,” said Chris Nikolaou, general manager of Advantage Grain, an Australian agricultural marketing company. “It’s definitely good for international demand, producers and the Chinese consumers.”
Kevin Karel, vice president of operations for The Arthur Cos., a grain merchandiser in North Dakota, said the purchases by China were boosting optimism among some farmers ahead of the impending meeting.
“We will need to see what the trade deal looks like,” he said, adding that he and others have been watching “every headline, every tweet, every post.”
An agreement between the world’s two biggest economies could reopen access to the world’s largest consumer of soybeans to US growers who have faced prolonged financial strain. Beijing had shunned U.S. soybeans so far this export season, using the commodity as a bargaining chip in its trade war with Washington. China has turned instead to South America for record shipments and have built ample supplies.
U.S. Treasury Secretary Scott Bessent had said that he expected the Asian nation to make “substantial” soybean purchases after American and Chinese negotiators came to terms on a range of contentious points at talks over the weekend.
However, any deal is likely to yield smaller rewards than was seen in the aftermath of the trade war in Trump’s first term, when producers saw their exports surge to near record levels.
China has no need to buy more than 10 million metric tons of U.S. soybeans during the marketing-year ending in August, according to StoneX Financial Inc. Vinicius Ito, a director at Marex Group Plc, said the Asian nation could potentially aim to buy closer to 20 million tons of U.S. soybean per season on a regular basis.
Those numbers would pale in compared to the more than 36 million metric tons the U.S. exported to China in the 2020-21 season — the result of the Phase One agreement that ended the first tariff war.
China’s appetite for U.S. soybeans may also be tempered as the world’s second-largest economy struggles to regain growth momentum, limiting demand for animal feed and food. Moreover, Beijing’s long-term strategy to diversify suppliers and reduce reliance on the US is expected to remain in place.
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