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China boosts purchases of soybeans from Brazil amid US trade deal uncertainty

China boosts purchases of soybeans from Brazil amid US trade deal uncertainty
Chinese importers purchased at least 20 cargoes of Brazilian soybeans last week, traders told Reuters, citing uncertainty over a trade deal with its traditional supplier, the United States.

According to traders, the purchases were for delivery when the new harvest reaches the market early next year.

Some US and Argentinian cargoes were also booked last week, one of them said.

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“Buying out of Brazil is probably a good hedge at this point. There’s plenty of uncertainty around US supplies so it’s probably a good idea to have at least some Brazil locked in,” said Darin Friedrichs, Senior Asia Commodity Analyst at broker INTL FCStone.

China, the world’s largest importer and consumer of soybeans, had been purchasing more than half of all US soybean exports before the two countries got involved in a trade war. The volume of year-on-year soybean shipments from the US shrank by more than 80 percent in September. Last year, US soybean supplies to China stood at a value of $12 - $14 billion. China needs soybeans to feed its livestock industry, the world’s largest, including 400 million pigs.

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The risks of shifting the ‘phase one’ deal’s completion into next year leaves Chinese buyers uncertain about market conditions.

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