China bought an estimated 300,000 tons of soybeans from the United States after Beijing waived tariffs on at least 1 million tons. The new purchase is scheduled for shipments by January to February.
Observers said China's new purchase of U.S. soybeans is good news for a lot of reasons. The latest purchase was the largest in the U.S. had among all its imports in at least two weeks. This was according to the US Department of Agriculture.
The purchase also relaxed tensions between the world's two largest economies as new tariffs loom for a 15 Dec. deadline. U.S. President Donald Trump has been sounding new levies on Chinese goods by the end of this week.
On the market front, China's soybean purchase lifted U.S. soybean futures for a straight session on Monday. The latest movie from the Asian powerhouse is now believed to be its way of sending an olive branch for the erratic Trump administration.
The estimated 300,000 tons of soybeans that China bought pushed its imports to approximately 10 million tons for the Sept-Aug period. That was higher than the 455, 000 tons it purchased in the same period last year.
Still, China's soybean import from the U.S. remained lower than what it used to get before geopolitical conflicts between the two nations. For example, at one point in 2017, China was importing a total of 21.5 million tons of soybeans from American farmers.
To understand China's significance to America's soybean market, note that the U.S. exports 30% of its soybeans all over the world. Half of that amount used to go all to China.
As China reduces its imports of U.S. soybeans, the country turned to South America, particularly Brazil for supplies. In December last year, China imported 2.4 million tons of soybeans from Brazil.
As the conflict between the U.S. and China continues, the latter has been looking for ways to be self-reliant when it comes to soybean exports. In 2019, the country produced 663.84 million tons of grain. Of that, soybeans accounted for 18.1 million tons which were a 13.3% increase from 2018.
Meanwhile, in the U.S., a Newsweek poll found that analysts believed Trump will delay other tariffs up until after 2020 election. Ten analysts who answered the poll said there won't be a trade agreement by 15 Dec. Eight analysts said Trump may be planning to use the attention he is getting to his advantage as campaign season kicks.
