China Blinks Over Soybeans


On Wednesday brokers in China placed orders for 1.13 million metric tons of soybeans. This will be the first purchase since July. For the first 10 months of 2018 soybean shipments to China have declined by over 70 percent as a result of a retaliatory 25 percent tariff which made the U.S. non-competitive. In 2017 China imported approximately 21 million metric tons representing almost 60 percent of total exports, compared with 7 million metric tons in 2018.


The announced purchase did not arrest the continued downward trend in price with the opening CME quotation of 902 cents per bushel. Traders had expected orders in the region of 3 to 5 million metric tons


The change of heart by China stems from a commitment to purchase “unspecified quantities” of agricultural commodities and industrial goods. This was an offer made at the December 1st dinner meeting between Presidents Xi and Trump in Buenos Aires.