China has reportedly made its first purchase of U.S. soybeans from this year’s harvest, ending a long-standing boycott ahead of the highly anticipated summit between President Donald Trump and Chinese President Xi Jinping.
Soybean Prices At 15-Year High Amid Optimism
China’s state-owned COFCO has bought three U.S. soybean cargoes, totaling approximately 180,000 metric tons, for shipment in December and January, Reuters reported, citing sources.
The total amount of the purchase is approximately 180,000 metric tons, to be shipped in December and January through ports in the Pacific Northwest, according to the report.
This would be the first time China has bought U.S. soybeans from this year’s harvest. The country had previously turned to South American suppliers due to the ongoing trade dispute with the U.S. This shift in demand has resulted in massive losses for U.S. farmers.
The news of the possible purchase sent Chicago Board of Trade (CBOT) soybean prices to a 15-month high of $10.91 per bushel on Tuesday. This surge follows a recent drop to a five-year low, indicating a renewed sense of optimism for a potential U.S.-China trade agreement.
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Soybean Trade As Pivotal Discussion Point
The resumption of U.S. soybean purchases by China is a significant development in the ongoing trade negotiations between the two countries. This move comes in the wake of a drafted trade deal between the U.S. and China, which is expected to halt the escalation of 100% tariffs and Chinese rare earth export controls. The deal is anticipated to resume U.S. soybean sales to China, a crucial development for U.S. farmers.
Earlier this month, Trump expressed optimism about the future of soybeans, a major U.S. export to China, and vowed to revive the soybean trade with China ahead of potential talks with Xi Jinping.
Global Demand Stays Strong
Notably, despite the U.S.-China trade tensions, global soybean demand remained strong, with investors closely monitoring the Teucrium Soybean ETF (NYSE:SOYB) as a direct exposure to CBOT soybean futures.
Jake Hanley, Managing Director and Senior Portfolio Specialist at Teucrium, said, “China doesn’t need U.S. beans, but they know they have leverage on this point and can offer agricultural purchases as part of any concession.”
Price Action: Over the past 12 months, Teucrium Soybean ETF gained 7.88% as per data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
