BEIJING: Chicago soybean futures firmed on Tuesday supported by a softer dollar, although escalating US-China trade tensions kept prices near year-to-date lows. Market participants, however, are growing hopeful that the latest tariff threats may be scaled back in the near future.
The most-active soybean contract on the Chicago Board of Trade (CBOT) rose 0.51% to $9.88 a bushel as of 0138 GMT.
On Monday, US President Donald Trump threatened an additional 50% tariff on Chinese imports starting Wednesday unless Beijing withdraws its 34% retaliatory tariff on the United States following Trump’s “reciprocal” duties.
China’s Ministry of Commerce on Tuesday pushed back, saying it would never accept what it called the “blackmail nature” of US actions and vowed to take countermeasures if needed.
Trade tensions dragged soybeans to $9.70 a bushel last Friday, their lowest level this year.
Ole Houe, director of advisory services at IKON Commodities in Sydney, said traders are gaining confidence that the tariffs may be watered down in the coming weeks.
“The talks Trump had with Vietnam and the vaguely outlined ‘concessions’ reportedly agreed upon combined with harsh domestic backlash in the US, now reaching Wall Street, have led traders to believe this may be just another brief episode of tariff posturing,” Houe said.
Corn added 0.16% to $4.65 a bushel, lifted by strong export sales on the back of a weaker dollar, which boosts the competitiveness of US farm goods.
Weather concerns also supported prices. Heavy rain and flooding in the Ohio Valley and northern Delta have stalled corn planting, according to weather forecaster Maxar. Wheat climbed 0.61% to $5.40 a bushel, buoyed by dryness concerns in the US Central and Southern Plains.
Chicago soybeans firm, still near year low on China tariffs
“Wheat had simply fallen too low and got caught up in a tariff war that actually affects it very little,” Houe said.
On Monday, the US Department of Agriculture (USDA) rated 48% of the US winter wheat crop to be in good-to-excellent condition, above analyst expectations but down from 56% a year ago.
Commodity funds were net buyers of CBOT corn, soymeal and wheat futures contracts and net sellers of soybean and soyoil futures on Monday, traders said.
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