(Bloomberg) -- China is continuing to buy US soybeans, confounding some traders who had expected the flow of shipments to slow down ahead of a potential trade war between both countries.
A Chinese state buyer picked up at least eight cargoes last week to build national reserves, according to traders familiar with the sales. Sales equivalent to about two cargoes were also concluded this week, the US Department of Agriculture said in a statement on Wednesday.
The recent purchases carry the risk that they could still be sailing to China as a major trade dispute with the US erupts after Donald Trump is inaugurated on Jan. 20. The Asian nation is the world’s largest soybean importer.
On Monday, the President-elect roiled markets after pledging to slap an additional 10% tariff on goods from China and 25% tariffs on all products from Mexico and Canada. Such a move would likely trigger similar retaliation.
China has recently stepped up soybean purchases in Brazil, but it’s still picking up American cargoes for supplies that will be put in reserve. US soybeans can usually be stored for longer because of their low moisture content.
“Now, China is not going to source 100% of their soybeans from Brazil,” said Jake Hanley, senior portfolio strategist at Teucrium, a firm that owns exchange traded funds on agricultural commodities. “They’re going to want to keep their foot in the door in multiple places. The US is the second largest exporter in the world for soybeans, so I don’t see China going away.”
For now, China is still buying. American exporters sold 132,000 metric tons of soybeans to China in the 2024-25 marketing year. That’s on top of more than 5 million tons sold since the election, USDA data showed — an amount equal to about 5% of China’s annual imports.
Arid conditions at the end of the US growing season were ideal for drying down crops. That’s lowered the moisture content and made American supplies even more appealing to Chinese state-run buyers planning to boost national reserves.
Still, the cargoes sold last week risk being stuck at sea if tariffs are put into place before vessels arrive.
--With assistance from Hallie Gu.
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