The purchase is the USDA’s ninth-largest daily sale of soybeans since 1977
By Diego Flammini
America’s largest soybean customer made its first purchase in months.
Yesterday, China bought 1.13 metric tons, or about 41 million bushels, of U.S. soybeans. The purchase is China’s first soybean transaction with the U.S. since the outbreak of the U.S.-China trade war in July.
China’s purchase is also the ninth-largest daily sale of U.S. soybeans since the USDA started recording daily sales reports in 1977.
The transaction is good news for producers.
“American soybean farmers prosper when they have access to international markets, and our trade relationship with China is critically important to our industry,” Davie Stephens, president of the American Soybean Association, said in a statement yesterday.
Some growers, however, want to see more Chinese commitment to U.S. soybeans.
U.S. President Trump and Chinese President Jinping agreed to a trade truce on Dec. 1. If the two countries can reach agreements on several trade issues within 90 days, the U.S. won’t place any additional tariffs on Chinese goods.
Until that three-month window passes, however, determining if trade relations between the two nations have improved will be difficult, said Dennis Gruenbacher, a soybean producer from Andale, Kan.
“The sale yesterday is big news, but I think if they bought even more beans I’d feel more comfortable about the situation,” he said to Farms.com. “Beans are really cheap right now and China needs beans, so the sale makes sense.
“Both countries have this 90-day agreement in place, so let’s see where we are on day 91.”
China’s recent soybean purchase may also affect federal assistance payments.
U.S. soybean farmers are receiving US$1.65 per bushel under the USDA’s Market Facilitation Program. Growers expected another round of payments this month, but that funding could be in jeopardy given the recent trade developments.
“We’ve been arm wrestling with our folks from” the Office of Management and Budget, Steve Censky, deputy secretary of the USDA, told the Iowa Soybean Association yesterday, Reuters reported.
The budget office “is always looking to hold onto money. I think this is a commitment the president had made,” Censky said.