Chinese companies buy more than $180 million worth of USA soybeans

Traders work on the floor of the New York Stock Exchange in New York US Dec. 11 2018. Brendan McDermid Reuters

The President said Tuesday that China is "back in the market" to buy American soybeans - but farmers said that was the first they had heard of any change since July, when China retaliated against new American tariffs by blocking imports of USA agricultural products.

The purchase of over 1.5 million tonnes of beans is the most concrete evidence yet that China is making good on pledges the U.S. government said Xi made when the two leaders met on December 1 and agreed to a 90-day detente to negotiate a trade deal.

Global markets had whipsawed since then, with little sign that China was making the substantial purchases of U.S. farm, energy and industrial products that Trump said would start immediately after the meeting.

The reports of the soy sales from the United States came after Trump said in an Oval Office interview with Reuters this week that he'd heard China is "buying tremendous amounts of soybeans" from American suppliers, followed by news that China had agreed to make a "sizeable" purchases of soybeans from the US.

This is the first significant purchase since the two countries began imposing tit-for-tat tariffs, with China slapping a 25 percent retaliatory levy on the American oilseed after Trump imposed duties on billions of dollars worth of goods from the Asian country. -China trade is going to go. The resumption of USA soybean purchases will provide some relief to American farmers who have seen exports to the world's biggest consumer plummet and domestic inventories pile up. The German company BMW AG also exports its sports utility vehicles to China from the U.S., and it saw its shares go up by 1.8%. Prices rose to $9.28 on Wednesday, the highest since June 15. The sellers included global agricultural merchants Cargill Inc, Louis Dreyfus Company and USA farmer-owned agriculture company CHS Inc.

"The risk right now is to the downside still, even though we had this reversal", said Gordon Charlop, managing director at Rosenblatt Securities in NY.

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The companies did not immediately respond to requests for comment.

Foreign Minister Wang Yi said Tuesday that Beijing will "spare no effort" to protect against "any bullying that infringes the legitimate rights and interests of Chinese citizens". Most of the supplies will be shipped from terminals in the Pacific northwest.

"I just heard today that they're buying tremendous amounts of soybeans".

Investors were also looking ahead to the U.S consumer price report later on Wednesday where an expected slowdown in headline inflation would only reinforce speculation of fewer rate hikes from the Federal Reserve.

"The news has driven the USA soybean price to its highest level since mid-June..." This year, it dethroned Apple as the world's second largest smartphone maker.

Trump reportedly said "If I think it's good for what will be certainly the largest trade deal ever made - which is a very important thing - what's good for national security - I would certainly intervene if I thought it was necessary".