CANBERRA: Chicago soybean futures edged higher on Wednesday, continuing a recovery from four-month lows hit earlier in the week, aided by rising prices in Brazil and a softer dollar, which made US agricultural goods more competitive in global markets.
Corn and wheat futures also gained ground.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.1% at $9.93-3/4 a bushel by 0354 GMT, a third consecutive daily gain. CBOT corn was up 0.1% at $4.69-1/2 a bushel, and CBOT wheat rose 0.1% to $5.40-3/4 a bushel, with the US dollar index weaker for a second day in a row. All three CBOT contracts were hit by a tit-for-tat tariff war that erupted last week between the United States and China, but soybeans were hit hardest, slumping as low as $9.69-1/2 on Monday.
China is the world’s biggest soy buyer and takes in around half of US soybean exports each year. Beijing’s willingness to retaliate against US tariffs has led to fears of weaker demand for US soybeans and pushed up the soybean basis in Brazil, a rival supplier, StoneX analyst Bevan Everett wrote in a note. “That has brought the US back to competitiveness,” he said. “Other unaffected destinations are finding US values cheaper than Brazil for April shipment.”
However, the United States may find it impossible to replace China, said Ole Houe, director of advisory services at IKON Commodities, predicting that Chicago prices would fall further.
Comments
Comments are closed for this article.