Exclusive: China snaps up US soybeans after pledge to Trump, but at high price, traders say

China's state-owned trader COFCO bought at least 14 cargoes of U.S. soybeans—about 840,000 metric tons—for December and January shipment, the biggest round of purchases since at least January and a clear effort to meet commitments from the Busan summit and Washington's target of 12 million tons; the purchases may grow if more deals are finalized. COFCO paid steep premiums ($2.35-$2.40/ bu over the January Chicago contract for Gulf shipments and $2.15-$2.20 for Pacific Northwest) well above Brazilian new‑crop premiums (~$1.25), a move traders call politically driven, and the buying pushed CBOT soybeans nearly 3% higher to a 17‑month high and lifted cash premiums—providing immediate relief to U.S. farmers and exporters, though the price differential raises questions about the sustainability and economics of continued purchases.

Analysis

China's state-owned trader COFCO bought at least 14 cargoes of U.S. soybeans—about 840,000 metric tons—for December and January shipment, the biggest round of purchases since at least January and tied by traders to commitments from the Busan summit and the White House's 12 million metric ton target. Traders reported eight vessels were for Gulf Coast shipment and the remainder from Pacific Northwest ports, with one trader estimating roughly 75% Gulf shipments; Reuters noted the total could grow if more deals are finalized.

COFCO paid steep premiums: $2.35–$2.40 per bushel over the January Chicago contract for Gulf shipments and $2.15–$2.20 for Pacific Northwest, versus about $1.25 for Brazilian new-crop soybeans, a delta traders characterized as politically driven. The news lifted CBOT soybean futures nearly 3% to a 17-month high and pushed cash premiums up by at least $0.10 per bushel, reflecting immediate demand for U.S. export loadings.

The purchases provide near-term relief to U.S. farmers and exporters after summer lows that pressured farm incomes, but the large premium paid over Brazilian supplies raises sustainability concerns and suggests some volume may be state-driven rather than market-driven. Market participants should watch for follow-on sales, confirmed shipment execution and any narrowing of the U.S.–Brazil premium as the key signals that this demand will persist rather than be a political one-off.

Key Decisions for Investors

• Consider modestly increasing tactical exposure to soybean futures or the SOYB ETF to capture the near-term price upside from Beijing's purchases, but keep position sizes limited because the premium paid appears politically driven and may reverse
• Monitor confirmations of additional COFCO deals, actual shipment volumes and convergence of cash premiums between U.S. and Brazilian supplies as triggers to extend positions or realize gains
• Protect U.S. farm and exporter long exposure with hedges or staged profit-taking given the elevated U.S. premium relative to Brazil and the risk that purchases could prove temporary