US farmers hoping more soybeans bought

US farmers hope that the announcement that China has bought US soybeans for the first time since its trade war with the United States began in July is just the beginning of what will be a full resumption of trade for the grain.

The US Department of Agriculture announced private sales of 1.13 million tons of US soybeans to China on Thursday.

“Having a million, million-and-a-half tons is great, it’s wonderful, it’s a great step,” USDA Deputy Secretary Steve Censky said at an Iowa Soybean Association annual meeting on Thursday. “But there needs to be a lot more as well, especially if you consider it in a normal, typical year, we’ll be selling 30 to 35 million metric tons to China.”

“We think it is a good start, it is promising,” Secretary of Agriculture Sonny Perdue told reporters in Washington. “We are certainly hopeful and expecting that it’ll come through,” he said, in reference to further sales.

John Heisdorffer, a soybean farmer in Keota, Iowa, and chairman of the American Soybean Association (ASA) agreed with Censky’s comments.

“It will take a lot more sales to China to bring the price of US soybeans back,’’ he said. ``We got a huge amount of stock. So, we generally need to see a lot more increase in sales, and the price is going to have a hard time. Even today, with the announcement, the futures were down.’’

Soybean futures in Chicago traded 1.4 percent lower on Thursday. While prices have recovered about 3.3 percent this month on optimism over the trade truce, they’re still down about 14 percent from this year’s high in March.

Bryce Knorr, senior analyst with Farm Futures, said, “Some in the trade may have been disappointed that the USDA announcement wasn’t for a larger amount. However, these large deals sometimes take several days to process, so the transactions could show up in a day or so.’’

Josh Gackle, a farmer from Kulm, North Dakota, and a member of the American Soybean Association board of directors, said that China’s purchases of soybeans may be a sign ``that things might be moving in the right direction’’ even if the size of the purchases “was just a fraction of what they would typically buy this time of the year. So it hasn’t addressed the long-term problem that we are facing.’’

Gackle also mentioned the current low price for soybeans: “If we have to sell our beans today, the price is just too far below what the break-even point, or what the profit line is for soybeans.’’

Gackle is a third-generation farmer in a state that ranks fifth in soybean production. He also grows wheat and barley, but soybeans are his main crop, taking up half of his 3,000-acre farm during a typical year.

On the current trade dispute between China and the US, he said, “I guess we soybean growers in general, we are just urging the administration to use American agriculture as a positive in the trade negotiation, and more trade with China and more selling of agriculture products would reduce the trade deficit that the president is trying to address. A tit-for-tat trade war I don’t think is helpful for either country.’’

Reuters contributed to this story.