By Karl Plume
CHICAGO (Reuters) -China’s state-owned grain trader COFCO bought at least 14 cargoes of U.S. soybeans on Monday, or at least 840,000 metric tons, for shipment in December and January, two traders with knowledge of the deals told Reuters.
The purchases were China’s largest since at least January and the most significant since a trade summit between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea last month.
Eight of the vessels were for shipment in December and January from U.S. Gulf Coast terminals, while the rest were for shipment in January from Pacific Northwest ports, one trader said. A second trader estimated around 75% of the sales were for Gulf shipment, with the remainder from the PNW.
The sales total may ultimately be larger if more deals are finalized, traders said.
The White House said China had agreed to buy 12 million metric tons of U.S. soybeans this year, but only a small volume of sales had occurred before Monday. China imported nearly 27 million tons of U.S. soy last year, according to U.S. government data.
Trump said on Friday sales would be on track by the spring.
“It is good to see the hard work of our U.S. trade negotiators and their Chinese counterparts turning into business for U.S. soy farmers and exporters. We look forward to this continuing as trade lanes are restored,” said Jim Sutter, chief executive officer of the U.S. Soybean Export Council.
China had largely shunned U.S. soybeans this season due to a heated trade war with Washington, sourcing supplies from export rivals Brazil and Argentina instead.
The absence of their top customer dragged U.S. soy prices to near multi-year lows this summer and heaped strain on a farm economy already struggling from rising costs for inputs like fuel, fertilizer and seeds. Farmers and trade groups have been working to open new markets for U.S. soy, but those efforts to replace Chinese demand have been difficult.
U.S. soybean futures on the Chicago Board of Trade rallied nearly 3% on Monday to a 17-month high on the China trade optimism.
Cash premiums for soybeans delivered to Gulf Coast and PNW terminals in the coming months and loaded for export jumped by 10 cents a bushel or more, traders said.
(Reporting by Karl Plume in Chicago; Editing by Chris Reese, Bill Berkrot and Richard Chang)
