China Steps Up U.S. Soybean Buying With Million-Ton Purchase

(Bloomberg) -- China is stepping up purchases of soybeans from the U.S. as Brazilian sales start to wane and the Asian nation seeks to meet its pledges under the trade deal with Washington, according to people familiar with the matter.

State-run buyers have purchased more than 20 cargoes, or over 1 million metric tons, of American soybeans in the past two weeks, said the people, who asked not to be identified because the information is private. The beans were bought using tariff waivers previously issued, the people said. Purchases of 136,000 tons reported by the U.S. government Tuesday were probably made Monday.

Top trade negotiators from both nations spoke by phone last week and pledged to create favorable conditions for implementation of the bilateral trade deal and cooperate on the economy and public health, according to a statement from the Chinese Ministry of Commerce. President Donald Trump later said he’s struggling with Beijing in the wake of the global coronavirus pandemic.

In another sign the phase-one trade deal could be on shaky ground, the Global Times, a communist party publication, reported that China may weigh voiding the agreement after U.S. criticism of the country’s handling of the coronavirus triggered anger among trade insiders. A suggestion to negotiate a new deal to tilt the balance more toward the Chinese side has also been floated, the hardline tabloid said.

China pledged to buy $36.5 billion in American agricultural goods, but the pandemic that is thought to have originated in the city of Wuhan has delayed the pace of purchases. While the nation has picked up a wide range of commodities from sorghum to wheat to corn and pork, sales of soybeans, the poster child for the trade war, have now started to accelerate.

Most of the purchases in the past two weeks were for loading at ports in the Gulf of Mexico, the people said. While some were for shipment from the current crop, others were for later in the fall when the new U.S. harvest starts. Calls to the Chinese customs department went unanswered.

After three days of gains, soybeans for delivery in July were down 0.3% to $8.5225 a bushel at 9:26 a.m. in Chicago.

Crop giant Archer-Daniels-Midland Co. said this month it was encouraged by China’s purchases so far. The Chicago-based company expects the Asian nation to buy 30 million to 35 million tons of American soybeans this year, Chief Financial Officer Ray Young said in a call with analysts on April 30.

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With assistance from Bloomberg