China Buys One Million Tons of U.S. Soybeans Ahead of Xi Jinping's Visit to America

Chinese state-owned trading companies made a massive purchase of U.S. soybeans last Friday (July 31), acquiring 14 to 16 vessels totaling around one million tons, taking advantage of falling prices. Traders indicated that this rare large-scale procurement was motivated not only by price considerations but also by Chinese President Xi Jinping’s planned visit to the U.S. in September and Beijing’s intention to fulfill its procurement commitments to Washington.

Reuters reported on Monday (August 3), citing four Asian traders, that each vessel carries approximately 65,000 tons of soybeans, with shipments scheduled for October. Sources noted that the purchases were primarily handled by China’s State Reserve Bureau (Sinograin).

An Asian trader at an international trading firm stated that the main reason for China’s expanded procurement was the significant drop in U.S. soybean prices last week. Additionally, Xi Jinping’s planned September visit to the U.S. and Beijing’s desire to honor its prior commitments to Washington to increase purchases of American agricultural products were also contributing factors.

The White House announced last October that China had agreed to purchase 25 million tons of U.S. soybeans annually through the end of 2028. However, prior to last Friday’s transaction, China’s purchases in 2024 totaled just over 4 million tons, falling far short of the annual target. U.S. President Donald Trump stated at the end of July that Xi Jinping would visit the U.S. on September 24.

Sources revealed that Chinese buyers paid a premium of $3.03 per bushel over the Chicago Board of Trade (CBOT) November soybean futures contract for soybeans exported from the U.S. Gulf Coast, and about $3 for those from the U.S. Pacific Northwest. The most actively traded CBOT soybean futures contract fell 5.2% last week, providing Chinese state traders with a favorable opportunity to buy at lower prices.

Neither Sinograin nor COFCO responded to requests for comment or confirmed the procurement details. Separately, Sinograin sold half of the 504,000 tons of imported soybeans offered at an auction last Friday, indicating that the national grain reserve agency is clearing storage space to receive the incoming U.S. soybean shipments.

Market attention now turns to whether China will remove the additional tariffs imposed on U.S. soybeans. If tariffs are lifted, private Chinese oil processors may also join the buying, further boosting demand for U.S. soybeans. However, it remains uncertain whether U.S. soybeans can remain competitive against other origins in the eyes of price-sensitive private buyers.