CHICAGO: US soybean futures dropped on Friday, giving up some of the gains made a day earlier on renewed fears of a trade war between the United States and China.
Beijing rattled grain markets on Wednesday by threatening extra levies on US goods including soybeans, the most valuable US farm export to China, before fears eased on Thursday as many cited China's reliance on US soybeans.
"The market convinced itself the US and China would reach a trade deal and the proposed bean tariffs would not be implemented," Brugler Marketing and Management said in a note to clients. "Last night President Trump raised the ante again by suggesting that he could request a list of another $100 billion in tariffs be drawn up."
China warned on Friday it was fully prepared to respond with a "fierce counter strike" of fresh trade measures if the United States follows through on President Donald Trump's threat to impose tariffs on an extra $100 billion in Chinese goods.
Chicago Board of Trade soybean futures had fallen as much as 2.9 percent during the overnight session but held support above Wednesday's low. In early trading during the US session, they were down less than 1 percent.
Corn futures also were lower, weighed down by the weakness in soybeans, while wheat remained firm.
For the week, soybeans were down 2.5 percent, wheat was up 0.3 percent and corn was flat.
At 8:52 a.m. CDT (1348 GMT), Chicago Board of Trade May soybeans were down 8 cents at $10.23-1/4 a bushel.
"The market came back after tanking on Wednesday and I think the market had its fingers crossed that they would come back from the edge but there doesn't seem any sign of that," Phin Ziebell, agribusiness economist at National Australia Bank, said of the US-China trade tensions.
CBOT May corn futures were 1-1/2 cents lower at $3.88 a bushel while CBOT May wheat was up 3 cents at $4.67-3/4 a bushel.
Corn was also included by China on its list of US goods that could be hit by extra tariffs. US shipments to China are relatively small but analysts said the trade row could reinforce a trend for Chinese importers to source more corn from Ukraine.
Wheat prices have been supported by concern over poor growing conditions for US wheat, with frost this week posing another threat to winter wheat in the drought-affected US Plains.
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