China pledges to buy US soybean on Trump visit

US soybean exporters have signed two memorandum of understandings with Chinese importers to sell 12 million mt of soybeans in the current marketing year, according to media reports.

A first agreement was signed between the China Chamber of Commerce of Foodstuffs and Native Produce buying 8 million mt of US soybeans worth $3.4 billion, Reuters reported.

Meanwhile a second agreement was signed between agribusiness giant Archer Daniel Midland (ADM) and China’s COFCO for 4 million mt of soybeans worth $1.6 billion

“This memorandum of understanding is a strong example of our countries’ increasingly productive and mutually beneficial trade relationship,” ADM said in a statement that did not confirm details.

ADM was unavailable for comment.

The deals were widely expected and soybeans firmed only 0.4% on the Chicago Board of Trade.

The deals equate to around $400-425/mt, which is around where Census priced soybeans for delivery this year.

It is unclear whether the deals mean additional soybeans will be purchased beyond what was already scheduled.

US soybeans are at this time of year the most competitive on the international market as Argentinian and Brazilian exporters run out of supply.

However, a good harvest in Brazil combined with a cheap real has seen China become an active buyer of Brazilian beans, threatening US market share.

China is expected to import 96 million mt of soybean this year.

On Wednesday China announced it had imported 77 million mt during January through October, leaving more than 9 million mt expected to be shipped during the last two months.