China is back in the market for U.S. soybeans after taking a holiday break, just as Washington and Beijing plan more trade discussions.
Specifically, on January 2, Cofco Corp., China’s top food company, was interested in soy prices as stated by Bloomberg. Yet, according to traders the inquiries were for February and March delivery. Futures rose 1.3% in Chicago.
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China’s interest occurred as trade officials from the two countries are scheduled to sit down in Beijing on 7-11 January, for the first face-to-face negotiation since President Donald Trump and his counterpart Xi Jinping agreed to a 90-day truce to their trade war last month.
Also, according to the U.S. Department of Agriculture, China last made a purchase of soybeans prior to Christmas, buying approximately 1.2 million tons for delivery by Aug. 31. That was on top of 1.56 million tons in the week ended Dec. 13.
Bulk carrier Spitha is voyaging to China after loading soybean at the Export Grain Terminal in Longview, Washington, according to vessel tracking and USDA inspection data. EGT is a joint venture between Itochu Corp. and Bunge Ltd.
Moreover, Dan Basse, president of AgResource addressed that Chinese purchases will be from both the Gulf and Pacific Northwest ports.
In the meantime, while China is back on trade, the US cash prices keep a steady pace, surprising some traders who expected the basis — the price gap between futures and physical prices — to move higher.
Concluding, Arlan Suderman, chief commodities economist in Kansas City, Missouri for INTL FCStone highlighted that they are expecting Chinese buyers to purchase US corn in January.
