China makes first major buy of US soybeans since Trump-Xi meet

China on Wednesday bought at least 500,000 tonnes of U.S. soybeans in its first major purchase of the oilseed since U.S. President Donald Trump and his Chinese counterpart Xi Jinping struck a trade war truce earlier this month, traders said.

The sales are one of the clearest signs yet that a bitter trade fight between the world’s two largest economies is thawing following the meeting of the countries’ leaders at the Group of 20 industrialized nations gathering in Argentina.

Chinese state-owned companies bought at least $180 million of soybeans, two U.S. traders said. A third trader, based in Europe, said the buyers were Sinograin and Cofco and sellers included Cargill Inc, Louis Dreyfus Company and CHS Inc .

The companies did not immediately respond to requests for comment.

One U.S. trader knew of nine cargoes traded and said there were probably more. A second trader with direct knowledge of the deals said Chinese state-owned firms bought at least 12 cargoes for shipment between January and March.

“China was buying right out of the gate this morning. It looks like we’re back in business now,” the second U.S. trader said.

Chicago Board of Trade soybean futures Sv1 scaled to highs not seen since midsummer when China imposed tariffs on U.S. shipments in July. The most actively traded January contract climbed as high as $9.28 per bushel as traders cautiously cheered the purchases.

“We want to see how many it’s going to be and what the timing is, and whether there are going to be follow-up sales,” Rich Feltes, vice president for research with Chicago-based brokerage R.J. O’Brien.

The soybeans are expected to be shipped from grain terminals in the U.S. Pacific Northwest, the most direct route to Asia, the U.S. traders said.

Trump told Reuters in an interview on Tuesday that China was buying a “tremendous amount” of U.S. soybeans and would also soon cut tariffs on U.S. autos. There was no record of major Chinese purchases on Tuesday in the market or in daily export data.

Trump agreed to leave tariffs on $200 billion worth of Chinese imports at 10 percent at the beginning of the new year rather than raise them to 25 percent as previously planned.

A 25 percent tariff on U.S. soybeans Beijing imposed on July 6 in retaliation for Washington’s duties on Chinese goods remains in effect. The higher duties discouraged private Chinese importers from making purchases as Brazilian soybeans, which are not subject to the tariffs, are less expensive.

China is the largest buyer of U.S. soy, importing about 60 percent of all U.S. overseas shipments last year in deals valued at more than $12 billion. But this year, it has relied on Argentina and top exporter Brazil for most of its soybeans used to feed the world’s largest pig herd.

“The Chinese evidently want the beans quickly as they have not been able to cover all their needs in South America,” the European trader said.

Reporting by Karl Plume; Additional reporting by Michael Hogan in Hamburg and Julie Ingwersen in Chicago; Editing by Caroline Stauffer, Simon Webb and Bernadette Baum