Asian markets headed higher on Thursday after signs that the trade war between the United States and China may be easing slightly. China placed its first order of soybeans from the U.S. since the agreement of the trade war truce between Presidents Donald Trump and Xi Jinping last week. According to reports by CNBC, Chinese state-owned companies purchased at least 500,000 tons of soybeans from the U.S. Reuters reported a purchase of over 1.5 million tons of soybeans.
China is the largest purchaser of U.S. soybeans, but it hasn’t been purchasing much lately due to the tariffs that President Trump placed on U.S. shipments in early July. The recent purchase may sound like a lot, but analysts are quick to note that it’s just a fraction of what U.S. farmers have lost since the trade war started, and it does little to reduce their growing supply. The sweetness of this year’s record-large harvest, which should be a victory for farmers, is turning sour, as they don’t have enough customers to purchase their crop. According to recent USDA reports, American farmers have sold approximately 8.2 million metric tons of soybeans to China since July, down from 21.4 million metric tons during the same period last year.
Chinese indexes were broadly higher on Thursday afternoon, with the Shanghai Composite up 1.31 percent as of 2:16 p.m. HK/SIN and the Shenzhen Composite up 1.50 percent. All other major indexes were also in the green. Japan’s Nikkei 225 gained 1.03 percent and Hong Kong’s Hang Seng Index was close behind with a 1 percent gain. South Korea’s Kospi was up 0.75 percent and Australia’s ASX 200 eked out modest gains with a 0.14 percent increase.
Asia’s rebound came after a day of gains on Wall Street on Wednesday. Oil prices were also higher for the third straight day as traders remained optimistic about additional trade to resume. U.S. WTI was up 0.33 percent to $51.32 per barrel, and Brent crude futures were up 0.57 percent to $60.49 per barrel.