CHICAGO (Reuters) - U.S. government data on Monday showed exports of soybeans to China picking up to the most in five months last week ahead of trade talks between the two countries in Shanghai, although the shipments were for beans bought months ago and new purchases have proven elusive.
China has yet to make the large agricultural purchases U.S. President Donald Trump and other top officials say were promised when Trump and Chinese President Xi Jinping met at the G20 summit in Osaka, Japan a month ago to restart stalled trade talks.
The U.S. Department of Agriculture said on Monday nine bulk U.S. soybean shipments carrying about 600,000 tonnes were inspected for export to China in the week ended July 25, the most for a single week since mid-February. One corn cargo was also shipped last week, the data showed.
The soy shipments were part of a series of about 14 million tonnes in goodwill purchases made by Chinese state-owned firms before trade talks broke down in May, U.S. traders and analysts said. Agriculture Secretary Sonny Perdue said last week he had expected China to ship some 20 million tonnes of soybeans, without specifying a time frame, noting the Chinese “still have a ways to go.”
Shipments of U.S. soybeans, the most valuable U.S. agricultural export, to top importer China have plunged since Beijing slapped a 25-percent tariff on American shipments more than a year ago.
Soybean prices have tumbled as U.S. stockpiles swelled to a record 1.8 billion bushels (49 million tonnes) as of June 1, putting more pressure on slumping incomes for farmers, a key Trump constituency.
“It is positive to see the shipments start to increase. But traders are looking forward and watching for any new sales,” said Terry Reilly, senior commodities analyst with Futures International.
“Prices would be much higher if China was sticking to their word and buying tens of millions of tonnes,” he said.
Chinese state broadcaster CCTV, citing China’s National Development and Reform Commission and Ministry of Commerce, said on Sunday that China has made enquiries to U.S. suppliers for the purchase of soybeans, cotton, pork, sorghum and other agricultural products since July 19 - and some sales have been made.
A small amount of U.S. pork has been sold. But the USDA has not confirmed any new soy purchases by China since the G20, even after China last week offered five companies a chance to buy limited amounts of U.S. soy tariff-free. USDA rules require exporters to report any grain sales of more than 100,000 tonnes to a single destination within 24 hours.
China bought about 14.3 million tonnes of U.S. soybeans in the 2018/19 season which began last September, the least in 11 years, and more than 4 million tonnes of those purchases have yet to be shipped, USDA data showed.
Its overall soy imports have decreased as African Swine Fever kills millions of pigs, decreasing demand for soy that is crushed in to animal feed.
U.S. volumes left unshipped at the end of August may be canceled or rolled to the next crop marketing year beginning Sept. 1 when newly harvested soybeans will further swell the end-of-season stocks. China last week canceled 148,000 tonnes of soybean orders, according to USDA data on Thursday.
China has shipped 1.62 million tonnes of previously purchased U.S. soybeans since the Osaka meeting, less than the several millions tonnes state media said had been shipped on Sunday.
White House economic adviser Larry Kudlow said on Friday he “wouldn’t expect any grand deal,” at the meeting in Shanghai and negotiators would try to “reset the stage” to bring the talks back to where they were before the May blow-up.
He did say he expected the Chinese to follow through with “large-scale purchases of U.S. agriculture products and services,” on CNBC television.
Reporting by Karl Plume in Chicago; Editing by Alistair Bell
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