China buys several US soybean cargoes despite rumours of pause

Chinese state-owned buyers were heard to have bought several more US soybean cargoes on Monday, despite reports the Chinese government has ordered state companies to stop purchasing soybeans and other agricultural products from the US.

Sinograin was heard price-checking more US soybeans on Monday evening Beijing time for PNW shipments between September and November 2020, and was said to have bought at least two cargoes and possibly three, according to market sources.

The deals come amid reports by Bloomberg News that the government instructed the stockpiler and state-owned crusher not to wind back purchasing US agricultural goods in view of escalating US-China tensions about Hong Kong.

“Sinograin checked US Gulf prices this afternoon,” one Asia-based soybean trader told Agricensus, adding that “we still saw US buying interest from crushers”.

Two other sources confirmed at least two and maybe three deals were executed between 1400 and 1700 London time on Monday for November shipment at prices between 165-170 c/bu over November futures.

Other private crushers were also price-checking for September shipments of US soybeans out of the Gulf on a CFR China basis.

Based on trade data gathered by Agricensus, China contracted 25-29 cargoes of soybeans last week of which around half were US soybeans.

Meanwhile, state-owned Chinese crusher Cofco continued to seek more September shipments of Brazilian soybeans on Friday, despite these being more expensive than US beans.

Cofco was heard bidding for more August/September and September shipments of Brazilian soybeans on a CFR China basis, regardless of the rising Brazilian cash premiums.