January 7, 2019 / 4:58 PM / 10 days ago

China buys more U.S. soy as officials meet for trade talks

CHICAGO (Reuters) - Chinese importers made their third large U.S. soybean purchase in the past month on Monday, as officials from both countries meet this week for the first face-to-face talks since agreeing to a 90-day trade war truce on Dec. 1, two traders with knowledge of the deals said.

FILE PHOTO: Soybeans sit in a truck as they are loaded at the Ruff Brothers Grain elevator in Leonore, Illinois, U.S., July 6, 2018. REUTERS/Daniel Acker

Chinese state-owned firms bought at least three cargoes of U.S. soybeans on Monday morning, or about 180,000 tonnes, the traders said. One of them said the total was closer to 15 cargoes, or about 900,000 tonnes.

The soybeans will be shipped mostly from terminals in the Pacific Northwest from January through March, with a smaller volume to be exported from U.S. Gulf Coast terminals, the traders said.

U.S. soybean exports to China, the world’s top buyer, have plummeted this season during a bitter trade dispute, with swelling supplies sending prices to near decade lows and U.S. farmers struggling to turn a profit.

China’s purchases of the 2018 harvest, estimated at around 5 million tonnes to date, is a fraction of China’s typical purchases from the United States. China last year had booked more than 23 million tonnes of U.S. soy by late December, according to U.S. Department of Agriculture data.

The window of opportunity to sell U.S. soy to China is closing quickly as farmers in Brazil, the world’s top soy supplier, have already started harvesting their latest crop.

U.S. President Donald Trump imposed import tariffs on hundreds of billions of dollars of Chinese goods last year and has threatened more to pressure Beijing to change its trade practices. China retaliated with tariffs of its own, including a 25 percent duty on U.S. soybean shipments which remains in place.

Officials from both nations are meeting in Beijing this week in talks scheduled to run through Tuesday. China’s Foreign Ministry on Monday noted his country’s “good faith” to work with the United States to resolve trade frictions.

About 60 percent of all U.S. soybean exports are shipped to China every year, with the vast majority of purchases made during the last three months of the year.

Grain traders have been awaiting news of further Chinese buying, although official U.S. confirmation of any deals has been suspended due to a partial U.S. government shutdown.

Benchmark U.S. soybean futures <0#S:> on the Chicago Board of Trade rose for a fourth straight trading session on Monday and touched a three-week high as renewed Chinese buying offset concerns about abundant global supplies.

Reporting by Karl Plume; Editing by Richard Chang

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