Analysis-China's largest US soybean buy in 2 years buoys prices, triggers sales by struggling farmers

Core Insights - The recent surge in U.S. soybean sales to China marks the largest in over two years, potentially signaling the start of increased purchases by Beijing after a period of avoidance due to trade tensions [1][4] - U.S. soybean prices have risen significantly, with a nearly 12% increase since mid-October, driven by the confirmed sales and expectations of further purchases [5][7] Sales Dynamics - Farmers in the U.S. have responded to the price increase by selling their crops, while some Chinese traders have also capitalized on the situation after previously booking long positions [2] - The confirmed sales of approximately 1.6 million metric tons within three days have led to U.S. prices becoming less competitive compared to Brazilian soybeans, affecting other importers like Turkey and Vietnam [3] China's Purchasing Strategy - China is currently managing its national reserves and may need to deplete some to accommodate U.S. shipments, as it has recently made significant purchases from South America [4] - Although U.S. officials have indicated that China has agreed to buy 12 million metric tons by the end of the year, the actual timing and volume remain uncertain, with skepticism expressed by industry analysts [5][6] Market Reactions - The Chicago Board of Trade (CBOT) soybean futures have reached their highest levels since June 2024, reflecting market optimism regarding the sales and potential future agreements [7]