China importing US soybeans again

Bloomberg:

China resumed buying U.S. soybeans, bringing some relief to farmers in Donald Trump’s heartland as President Xi Jinping works toward a trade deal with his American counterpart.

The giant Asian commodity importer bought 1.5 million to 2 million metric tons of American supply over the past 24 hours, with shipments expected to occur sometime during the first quarter, the U.S. Soybean Export Council said, citing unidentified industry sources.

State stockpiler Sinograin and its top food company Cofco are planning more purchases, according to people with knowledge of the plan. On Thursday, the U.S. Department of Agriculture disclosed sales of 1.13 million tons to China.

The purchases represent a major gesture by China toward easing tensions between the world’s two largest economies. Soybeans have become the poster child of the trade dispute, with the Asian nation shunning imports from farms in rural communities that voted for Trump in 2016. Futures in Chicago tumbled as a result, while the 2018 harvest had been piling up, unsold, in silos, bins and bags across the U.S. Midwest.

“The shipments, mainly from the Pacific Northwest, will help reduce stockpile pressures for U.S. soybean farmers,” said Li Qiang, chief analyst with Shanghai JC Intelligence Co. Also “these shipments can ease China’s own shortage of supplies in the first quarter of the year.”

This is the first significant purchase since the two countries began imposing tit-for-tat tariffs, with China slapping a 25 percent retaliatory levy on the American oilseed after Trump imposed duties on billions of dollars worth of goods from the Asian country.
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The purchase on a three-month timetable seems to imply that a trade deal will need to be worked out in the coming months to get long-term purchases.  It does look like China is willing to make some concessions to Trump in the negotiations.