China taking soybean cargoes in Brazil, dashing hopes for big American sales – Bloomberg

US and China are set to sign a phase one deal next week, but as Bloomberg reports, China is picking up soybean cargoes in Brazil, dashing hopes for big American sales immediately after a partial trade deal is signed, according to people familiar with the matter.

Key notes

Private buyers from China have purchased about 10 cargoes from the South American nation so far this week, said the people, who asked not to be identified because the deals are private. Most of the soybeans are for shipments from January through April, the people said.

The Brazilian purchases, while not unusual for this time of year, come just as the U.S. and China are expected to sign a phase-one trade pact on Jan. 15. They also highlight China’s willingness to buy American supplies only when they are cheaper than elsewhere.

Brazil, the world’s largest soybean exporter, is starting to harvest what is forecast to be a record crop, bringing prices down. Brazilian supplies are already cheaper than those from the U.S., attracting Chinese buyers.

China has pledged to buy $40 billion a year in American agricultural products, a high target that will require big purchases of soybeans from the U.S.