UPDATE 1-China to buy 5.5 mln T of US soybeans-USDA

* China intends to buy 5.5 million tonnes of U.S. soybeans

* Chinese importers could choose to back out of agreement

* Shipments are for 2010/11; current value is $3 billion
(Recasts, updates with comment from industry, adds
background)

By Christopher Doering

WASHINGTON, Nov 23 (BestGrowthStock) – Chinese importers intend to
buy more than 5.5 million tonnes of U.S. soybeans from seven
U.S. companies, including Cargill, valued at nearly $3 billion,
according to the U.S. Agriculture Department and industry
officials.

The U.S. Soybean Export Council said the seven exporting
companies — Archer Daniels Midland Co (ADM.N: ), Bunge North
America (BG.N: ), Cargill, Zennoh Grain Corp, Louis Dreyfus Corp,
Columbia Grain Trading and Toepfer International — signed
purchase agreements with 10 Chinese companies.

Paul Burke, director of marketing and industry relations at
the U.S. Soybean Export Council, said Chinese importers and
processors notified the United States in September they were
interested in purchasing soybeans.

He said the agreement amounts to an intention to purchase
soybeans during the current 2010/11 marketing year, and Chinese
importers could choose to back out of the agreement because
they had not signed a contract.

“If the price went up to $16 the Chinese company could walk
away,” said Burke.

“I think the intentions are that they put in the quantities
that they intend to purchase and the general timeframe but the
negotiation of the price comes later,” he said.

Chicago Board of Trade January soy (SF1: ) was up 2-1/2 cents
per bushel at $12.24 on Tuesday.

Agriculture Secretary Tom Vilsack said last year China was
the second largest export market for U.S. agriculture, the
largest for U.S. soybeans with sales of $9 billion in 2010. A
USDA spokesman directed further questions on the deal to the
industry.

“The U.S.-China trade relationship continues to flourish,
thanks in large part to agriculture,” said Vilsack.

U.S. farm exports to China have surged from $1.5 billion in
fiscal year 2000 to $15 billion in 2010, the USDA noted.

Soybean exports are forecast for a record 1.57 billion
bushels in 2010/11, due to high demand. China accounted for 70
percent of U.S. soybean exports since the Sept. 1 start of the
marketing year.

“In the soy industry we look at the Chinese market as being
very important,” said Burke.

In late August, USDA said U.S. farm exports are forecast to
leap 5 percent to $113 billion in fiscal year 2011, the
second-largest on record.
(Editing by David Gregorio)

UPDATE 1-China to buy 5.5 mln T of US soybeans-USDA