Large Soybean Purchases Renew Global Market Optimism
China made its largest U.S. soybean purchase in months, buying at least 14 cargoes, according to two traders familiar with the transactions, Reuters’ Karl Plume reported. This marks the most substantial purchase since at least January and the most notable since USDA administration and President Xi Jinping met in October.
“China is buying U.S. soybeans to meet the pledges it made to Washington at the trade summit in Busan, South Korea, even though the cargoes are priced higher than rival Brazilian offers, two Asia-based traders said,” Plume reported. “‘This bigger round of U.S. soybean buying is no longer a goodwill gesture but a manifestation of China’s commitment to the Busan terms,’ said a Singapore-based trader.”
China’s state-owned COFCO reportedly bought at least 840,000 metric tons of soybeans for December and January shipment, according to traders. Most of the shipments will originate from Gulf Coast terminals, with the remainder from Pacific Northwest ports. Another trader estimated that roughly 75% will ship from the Gulf.
During the government shutdown, USDA daily sales data confirmed China had already purchased 232,000 metric tons, pushing total recent commitments close to 1 million metric tons.
Asian traders estimate COFCO paid a premium of $2.35–$2.40 per bushel for Gulf shipments and $2.15–$2.20 for Pacific Northwest shipments—significantly higher than premiums for Brazilian soybeans. "It is a political move, as prices being paid by COFCO are much higher than Brazilian prices," Plume reported. ‘Chinese companies are just doing it as a commitment to buy U.S. soybeans."
Bloomberg’s Hallie Gu said, "the purchases have reignited market optimism around the soybean trade between the two agricultural powerhouses, which was worth more than $12 billion last year and will underpin any trade agreement.”
Axios reported that Treasury Secretary Scott Bessent acknowledged the trade deal is not finalized but expressed confidence in China’s commitments, saying he expected the agreement to be completed by Thanksgiving. “‘China will honor their agreements,’” Bessent said.