PARIS/BEIJING: Chicago soybean futures rose on Tuesday to move away from a four-month low, tracking a wider recovery in financial markets as investors assessed the chances for negotiations to avert U.S.-led tariffs.
Corn and wheat, less affected than soybeans by tariff concerns, extended gains to trade around two-week highs. A weaker dollar that makes dollar-dominated commodities cheaper for holders of other currencies, and weather risks lent support.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 1.1% at $9.93-1/2 a bushel as of 1131 GMT. The contract hit its lowest since December 20 on Monday before closing higher.
U.S. President Donald Trump’s tariff announcement last week sparked a rout in shares and crude oil as investors took the view the risk of recession had increased and demand for commodities could shrink.
Despite further threats by Washington and Beijing of more retaliatory tariffs, markets took comfort this week in the readiness of some U.S. trading partners, including Japan and the European Union, to negotiate.
“Commodities are staging a small comeback as global markets calmed down following a three-day sell-off,” Ole Hansen, head of commodity strategy at Saxo Bank, said.
Chicago soybeans firm, still near year low on China tariffs
Soybeans had reacted more sharply than cereals to tariff headlines as traders expected leading importer China would halt purchases of U.S. supplies.
On the corn market, there has been relief that Mexico, the main export outlet for U.S. corn, has been spared blanket tariffs.
Heavy rain in part of the U.S. Midwest, which may slow early U.S. planting, and dryness in Brazil have also underpinned corn.
Weather concerns for U.S. crops also supported wheat prices that had touched an eight-month low in late March.
“Wheat had simply fallen too low and got caught up in a tariff war that actually affects it very little,” Ole Houe, director of advisory services at IKON Commodities in Sydney, said.
CBOT corn added 0.4% to $4.66-1/4 a bushel and CBOT wheat climbed 0.9% to $5.41-1/4 a bushel.
On Monday, the U.S. Department of Agriculture (USDA) rated 48% of the U.S. winter wheat crop to be in good-to-excellent condition, above average analyst expectations but down from 56% a year ago.
The agency estimated that 2% of the expected corn area had been planted, in line with market expectations.
Comments
Comments are closed for this article.