Soybeans extended gains after the U.S. said China agreed to halt retaliatory tariffs following a key summit last week and reiterated the Asian nation will ramp up purchases this year.
China will suspend all levies announced since March 4 on soybeans and other U.S. agricultural products including corn, wheat, sorghum and chicken, according to a fact sheet released by the White House on Saturday. Beijing is yet to confirm the halt, and didn’t directly address a question on the duties last week.
The White House added that China agreed to purchase at least 12 million tons of U.S. soybeans by the end of the year, and at least 25 million tons annually over next three years. Agriculture Secretary Brooke Rollins first flagged the volumes last week after the summit ended without those details.
The U.S. statement is the most detailed account yet of the trade deal following a meeting between President Donald Trump and his Chinese counterpart Xi Jinping in South Korea. The pact has fueled optimism that agricultural trade between the two giants, particularly soybeans, could return to normal levels.
China had shunned U.S. soybeans as tensions between the two nations soured, taking more from South American producers. Just days before the meeting, China bought its first US cargoes, following up with further purchases after the summit. The trade was worth more than $12 billion last year.
However, even with the removal of the retaliatory tariffs, U.S. cargoes will still incur duties of 13%, making them uncompetitive with Brazil, traders said.
Meanwhile in the wheat markets, China is seeking to buy U.S. wheat in what would be the first purchase in more than a year, following last week’s trade truce.
A major grains importer in Asia’s largest economy made inquiries over the weekend for U.S. cargoes loading from December to February, according to people familiar with matter, who asked not to be named as they aren’t authorized to speak to media.
China hasn’t bought any American wheat since early October last year, according to U.S. Department of Agriculture data, and the inquiries come after the Asian nation resumed purchases of US soybeans last week.
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