China’s COFCO has bought several shipments of U.S. soybeans ahead of a scheduled meeting between President Donald Trump and Xi Jinping in South Korea on Thursday, according to Reuters.
Chinese buyers have shunned U.S. soybeans since May, after bilateral trade tensions between the two countries began to ratchet up.
China’s state-owned COFCO did not immediately respond to a request from Agri-Pulse to confirm the shipments and their volumes. Bloomberg first reported the deal. Reuters, however, cites two trade sources that say the company has bought three soybean cargoes totalling around 180,000 metric tons.
The announcement comes just days after Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer suggested U.S.-China tensions could be about to thaw. The two said that Chinese and U.S. officials have hashed out a “framework” that will see China commit to “substantial agriculture purchases.”
The Wall Street Journal reported on Tuesday that the U.S. is considering halving a 20% tariff on Chinese products imposed over its role in the U.S. fentanyl crisis as part of the deal.
Agriculture Secretary Brooke Rollins argued that the purchases, the first of the latest soybean harvest, represent a “positive step forward” for U.S. farmers.
“This purchase, coming directly ahead of the Trump-Xi talks, shows that America means business and that we will restore balance, give U.S. producers the opportunities they’ve earned, and send a message that when America leads in agriculture, the world listens,” Rollins said in a post to X Wednesday. “This is a great start as we continue to build a system where American agriculture thrives and competes on fair terms.”
Angie Setzer, a partner at Consus Ag Consulting, pointed out that 180,000 tons is "a drop in the bucket" relative to overall Chinese soybean demand, which topped 26 million tons last year. But she agreed that it is a good sign for U.S. farmers.
"It's a great start," she told Agri-Pulse in an email.
Last month, China bought around 20 cargoes of soybeans from Argentina, however. Analysts estimate that China has enough soybean stocks to meet demand until January when Brazil's next harvest begins. Accordingly, estimates of Chinese soybean imports for this year are lower than previous years, but Setzer says she's optimistic that the U.S. could still see significant exports to China for this harvest.
"Overall, my hope is we see China come in to buy the 16 [million metric tons] or so folks believe is currently factored into the balance sheet," Setzer said, adding that "a continuation of business" is likely as long as Thursday's meeting goes well.
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Setzer estimates that China's state-owned firms could buy 8-10 million metric tons of U.S. soybeans, while private crushers will need 5-8 million between now and the end of January. A further two million tons of orders could also land in February, she said, as Brazil's exports begin ramping up.
U.S. soybean futures had already rallied from recent lows on news that the U.S. and China are close to a deal. They climbed to a 15-month high on Tuesday.
Sen. Roger Marshall, R-Kan., told Agri-Pulse that he believes the soybean order is "the tip of the iceberg," but stressed it isn't only soybeans that are suffering from reduced Chinese purchases.
"I'm hoping there's something to follow up with some type of sorghum announcement as well," Marshall said.
House Ways and Means trade subcommittee Chair Rep. Adrian Smith, R-Neb., also told Agri-Pulse in an email that the purchases are "a positive signal" for U.S. farmers and ranchers ahead of tomorrow's Trump-Xi meeting.
Stephen Nicholson, a grain and oil seed analyst at Rabobank said the move could be "an olive branch" from Beijing, "ahead of a likely difficult discussion between the U.S. and China." It offers the administration a chance to celebrate a "win" after facing some criticism in recent days over its plan to import Argentinian beef and provide financial support to the country.
"From a market perspective, the market is not impressed today—this goes in the category, 'buy the rumor, sell the fact,'" Nicholson added in an email.
Trump told reporters on Wednesday that he expects U.S. tariffs on Chinese products to fall after Thursday’s meeting.
“I expect to be lowering that because I believe they can help us with the fentanyl situation,” Trump said on Air Force One. He also added that the two countries could “work out something” on China’s latest move to tighten rare earth export controls – which prompted a fresh threat of 100% tariffs from Trump earlier this month.
“It's going to work out very well,” Trump reassured a group of business leaders on Tuesday.
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