China buying more US soy just days after last spree

Beijing

CHINA is back buying more US soybeans just days after the last round of purchases by the world's top importer.

State-run buyer Cofco Corp bought almost 1 million tonnes of the oilseed, while Sinograin purchased more than a million tonnes, the two companies said in separate statements on Tuesday. That follows an announcement on Saturday that they had purchased 2 million tonnes from America after officials from the two countries met in Washington for trade negotiations.

On Monday, the Chinese state-run companies were seeking soybean for shipment from both ports in the US Gulf and the Pacific Northwest, according to people familiar with the matter, who asked not to be identified because the information is private. The cargoes sought were for shipment around the summer months, the people said.

American exporters sold 2.603 million tonnes of soybeans to China for delivery by Aug 31, the US Department of Agriculture said on Tuesday. That's the third-largest daily transaction in the agency's records. On Monday, the USDA reported sales of 612,000 tonnes for the same period.

While the amount is still just a fraction of the 30 million to 35 million tonnes that China typically buys from America in a year, the frequency of the purchases may give US farmers some cheer. It's also a sign that China is willing to work toward ending trade hostilities between the two nations as President Donald Trump pressures counterpart Xi Jinping to buy more American goods to close a trade gap.

Sinograin is taking steps to implement the mutual understanding agreed on by China and the US, Sinograin's spokesman said on Tuesday.

After Mr Trump said that China was expected to buy 5 million tonnes of US beans, the market was disappointed by Saturday's news. Farmers want to see a larger amount of orders to whittle down inventories that have ballooned following China's decision to adopt 25 per cent retaliatory tariffs on American farm products.

Still, with many largely expecting China to be absent from the US market this week as the Asian nation winds down for Lunar New Year celebrations, the latest purchases may come as a surprise and raise optimism that Mr Xi is making good on his pledge to boost American imports. BLOOMBERG