China poised to buy more U.S. soybeans: sources

© Reuters. FILE PHOTO: Farmer Lucas Richard of LFR Grain harvests soybeans at a farm in Hickory

By Hallie Gu and Karl Plume

BEIJING/CHICAGO (Reuters) - China plans to make a third round of U.S. soybean purchases within days, two sources familiar with the matter said on Thursday, after a trade war truce between Washington and Beijing this month triggered two waves of buying.

China bought U.S. soybeans for the first time in six months after U.S. President Donald Trump and his Chinese counterpart Xi Jinping met on Dec. 1 and set a 90-day negotiating window to resolve their trade differences.

(GRAPHIC: U.S. soybean sales to China dry up in trade war - https://tmsnrt.rs/2QT8Qlu)

More than 2 million tonnes of additional purchases are likely before the Christmas holiday on Dec. 25, according to one of the sources, bringing total U.S. sales to China to more than 5 million tonnes in December.

Chinese importers bought only around 4 million tonnes of U.S. soybeans last December, according to U.S. Department of Agriculture data, but season-to-date sales coming into the month last year were 40 times greater at 20.6 million tonnes, compared to about 515,000 tonnes at the beginning of this month.

If China follows through on all the expected buying, total sales would still be less than a quarter of what they were in late December last year.

Soybean future prices have been falling as the purchases so far pale in comparison to the more than 31 million tonnes, or nearly 60 percent of all U.S. soybean exports, sold to China for $12.25 billion last year.

Traders are eyeing record U.S. soybean stockpiles and the looming harvest of what is expected to be the largest-ever crop in top global exporter Brazil in coming weeks.

"The window is closing rapidly. Even if we get another 2 million tonnes by Christmas, it's peanuts in the big pot," said Terry Reilly, senior commodities analyst with Futures International.

Benchmark Chicago Board of Trade January soybean futures scaled to $9.28 a bushel, the highest since midsummer, after Reuters reported state-run Chinese companies had bought more than 1.5 million tonnes of U.S. soybeans on Dec. 12. Prices have fallen more than 3 percent since then, barely above levels before the Trump-Xi meeting.

In its weekly export sales report, the U.S. Department of Agriculture on Thursday confirmed a net 1.561 million tonnes in U.S. soybean sales to China last week. The agency, via its daily reporting system, cited private sales of another 1.403 million tonnes to China this week, along with 257,000 tonnes to undisclosed buyers, which are often Chinese importers.

Separately on Thursday, China's state-run Sinograin confirmed recent purchases of a few batches of U.S. soybeans, without specifying volumes.

The purchases have been seen as a goodwill gesture before the next round of U.S.-China talks. The United States has a long list of complaints against China on intellectual property, forced technology transfers and industrial subsidies.

China in July imposed a 25 percent tariff on imports of American soybeans in response to U.S. tariffs on Chinese goods. It remains in place as the two countries negotiate to resolve their trade dispute by a March 2 deadline.