By Naveen Thukral, Ella Cao and Karl Plume
Aug 3 (Reuters) - The U.S. Department of Agriculture on Monday confirmed Chinese purchases of nearly half a million tons of soybeans, after traders said earlier that Chinese state trading companies had bought 14-16 cargoes on Friday totalling one million tons.
On Friday, Reuters reported that Chinese government buyers purchased at least eight cargoes of U.S. soybeans for shipment from U.S. Gulf Coast terminals and six cargoes for shipment from Pacific Northwest
ports in October and November, citing two U.S. traders with knowledge of the deals.
Buyers were taking advantage of lower prices in a flurry of purchases ahead of President Xi Jinping's expected U.S. visit next month.
"These deals were mainly done by Sinograin and the main reason is a drop in prices last week. There are plans for President Xi to visit the U.S. in September so China is also trying to buy U.S. beans under its commitment made to Washington," an Asia-based trader at an international trading company told Reuters on Monday.
The companies paid a premium of $3.03 per bushel over the November Chicago Board of Trade contract for shipment from the U.S. Gulf and a $3 premium for Pacific Northwest shipments, said one source. The most active soybean contract fell 5.2% last week.
The White House announced in October that China had agreed to buy 25 million tons of U.S. soybeans annually until the end of 2028. Before Friday's purchases, China had bought slightly more than 4 million tons this year, reflecting China's strongest pace of buying of U.S. farmers' upcoming harvest in four years, according to USDA data.
State-run companies Sinograin and COFCO did not respond to requests for comment or confirmation of the purchases.
China's Sinograin sold about half of the 504,000 tons of imported soybeans on offer at auction on Friday as the state stockpiler makes room for incoming U.S. cargoes.
In late July, U.S. President Donald Trump said his Chinese counterpart Xi would visit the country on September 24.
Markets are waiting to see whether China will remove tariffs on U.S. soybeans, which would allow private crushers to participate in purchases.
It remains unclear, however, whether U.S. soybeans would be competitive enough to attract these price-sensitive buyers.
(Reporting by Naveen Thukral and Ella Cao; Editing by David Goodman and Tony Munroe)
