CANBERRA: Chicago soybean futures extended gains on Thursday after shooting up 2% in the previous session when U.S. President Donald Trump said he would pause tariff increases on dozens of countries to allow time for trade negotiations.
Trump’s stunning U-turn sent equities and oil prices sharply higher and raised hopes that some disruption of agricultural trade can be avoided, despite his decision to raise tariffs again on China, the biggest buyer of U.S. farm goods.
Corn futures rose and wheat edged lower.
Traders feared that more countries would follow China and block U.S. imports, reducing demand for U.S. crops and putting downward pressure on Chicago prices, said Commonwealth Bank analyst Dennis Voznesenski.
But so far few have done so and Trump’s de-escalation reduces the risk that they will, he said.
“Now that Trump’s pushed back the larger tariffs, the market is less concerned that those countries will retaliate,” he said.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.2% at $10.15 a bushel at 0642 GMT. CBOT corn rose 0.2% to $4.74-3/4 a bushel and wheat was down 0.1% at $5.42 a bushel.
All three contracts are now at or above their levels before Trump announced his barrage of tariffs last week, helped partly by a weaker U.S. dollar.
Chicago soybeans continue recovery on weaker dollar
Damage has been done to U.S. farm exports, however. Asian buyers are reducing purchases and China, which typically absorbs around half of U.S. soybean exports, has imposed counter-tariffs big enough to halt all shipments.
Firm U.S. cash markets for soybeans are supporting prices. Farmers have been reluctant to book fresh sales at current prices, forcing buyers to raise their bids to get supplies, traders say.
The market is meanwhile waiting for a monthly supply and demand report due from the U.S. Department of Agriculture on Thursday that could shift prices.
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