China buys more US soybeans as trade talks kick off: traders

CHICAGO: Chinese state-owned firms bought about 1.5 million tonnes of U.S. soybeans on Thursday for shipment in July and August, in their second major purchase of U.S. supplies this month, three traders with knowledge of the deals said.

The purchases come as U.S. and Chinese officials meet in Beijing for negotiations aimed at ending a protracted trade war between the two economic giants that has slashed U.S. commodity exports to China, most notably soybeans.

In a positive sign for the talks, U.S. officials told Reuters that China had made proposals on a range of issues that go further than before, including on forced technology transfer, a particularly large obstacle in talks thus far.

Thursday's soy purchases were mostly for shipment from the U.S. Gulf Coast, two of the traders said.

They were also the latest in a string of goodwill U.S. commodity purchases by Chinese state-owned firms since December, when the United States and China agreed to a trade war detente as the two sides attempted to negotiate.

Most recently, Chinese buyers booked about 1.7 million tonnes following U.S.-China trade talks in Washington, during which U.S. officials said Beijing vowed to buy an additional 10 million tonnes of the oilseed.

Accelerated Chinese buying of U.S. soybeans helped to narrow the U.S. trade deficit by the most in 10 months in January, according to U.S. Commerce Department data on Wednesday.

Still, U.S. soybean sales to the world's top soybean importer were well behind their usual pace after Beijing slapped steep tariffs on U.S. shipments last summer, effectively halting purchases by China's private crushers.

Thursday's deals bring China's total purchases of the latest U.S. soybean crop to around 12.7 million tonnes, compared with more tan 28.5 million tonnes sold at the same point last year, to according to U.S. Department of Agriculture data.