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(Bloomberg) — China is selling large volumes of soybeans from its state reserves, as it steps up purchases from the US to fulfill an apparent agreement between the two countries in late October.
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Beijing often auctions soybeans to manage and rotate supplies from its substantial state reserves, but these are the first sales since it resumed buying from the US following the trade truce with Washington.
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There have already been two auctions since last Thursday, with around 720,000 tons sold out of the more than 1 million tons on offer, according to official statements and Chinese consultancy Mysteel. Authorities will hold another auction for 550,000 tons on Friday.
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Soybeans, mainly used for animal feed and cooking oil in China, have become a bellwether for the state of relations between the world’s two biggest economies since the summit in South Korea between US President Donald Trump and his Chinese counterpart, Xi Jinping.
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Chinese state firms started buying American soybeans in the days before the meeting, and had taken a total of 2.5 million tons by the middle of November. There have been more purchases since then, but the US government shutdown has delayed data on the latest total. Privately owned crushers, meanwhile, have largely steered clear of the beans, which still incur a 13% import tariff and remain unprofitable to process.
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China is expected to buy at least 12 million tons of American soybeans by the end of February, according to the latest remarks from officials in Washington. Beijing has not officially confirmed those numbers, but has moved to reduce tariffs on the crop and lifted import bans on three US exporters. The cargoes usually take around a month to get to China, and large-scale storage will be required if they’re not immediately crushed.
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This Week’s Diary
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(All times Beijing)
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Wednesday, Dec. 17:
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• China’s Nov. output data for base metals and oil products
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• China solar association CPIA’s annual conference, Xi’an city, day 1
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• Sinopec launches its 2060 Energy Outlook Report
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Thursday, Dec. 18:
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- China’s 2nd batch of November trade data
- Grains, sugar, cotton, palm oil, pork & beef imports
- Oil-product imports & exports breakdown; LNG & pipeline gas imports
- Bauxite, steel and aluminum imports; rare-earth product, alumina and copper exports
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Friday, Dec. 19:
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- Mysteel’s annual steel market summit in Shanghai, day 1
- China weekly iron ore port stockpiles
- Shanghai exchange weekly commodities inventory, ~15:30
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Saturday, Dec. 20:
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- China’s 3rd batch of Nov. trade data, including country breakdowns for energy and commodities
- Mysteel’s annual steel market summit in Shanghai, day 2
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Sunday, Dec 21:
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- Mysteel’s annual steel market summit in Shanghai, day 3
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