CHICAGO: US soybean futures on Friday fell to their lowest level in more than two weeks after a highly anticipated US-China summit failed to produce specific deals for American farm goods, traders said.
Corn futures set a three-week low and wheat futures also weakened amid disappointment over the outcome of the summit between US President Donald Trump and Chinese President Xi Jinping in Beijing. “We didn’t get anything concrete,” said Matt Wiegand, commodity broker for FuturesOne in Nebraska.
Ahead of the summit, many traders had not expected China, the world’s biggest soybean importer, to go beyond a previous commitment to buy 25 million metric tons of US soy annually from next season. Still, others had hoped for new purchase deals and factored their expectations into the markets before the summit.
Lacking information on any new deals, most-active Chicago Board of Trade soybean futures fell 13-3/4 cents to USD11.78-3/4 a bushel by 10 a.m. CDT (1500 GMT). CBOT corn dropped 9-3/4 cents to USD4.57-3/4 a bushel, while wheat tumbled 21-3/4 cents to USD6.36-1/4 a bushel. “We were overbought and priced a premium in ahead of it,” Wiegand said. “We didn’t get anything worthwhile on the back end of it.” US Trade Representative Jamieson Greer said Washington expected “double-digit billions” in Chinese purchases of US agricultural products over the next three years.
He noted the deal the countries made last October for China to buy 25 million metric tons of US soy per year for each of the next three years. It was not immediately clear what products would be included in the “double-digit billion purchases.” Traders and analysts said they expected the existing soybean commitment to be part of the deal, which alone would be worth more than USD10 billion. “If USD10 billion is the total for all ags combined, it is disappointing,” a European trader said.
The trader added that such a sum would only cover most of an existing soybean commitment but that “a figure toward USD20 billion would change the picture entirely”. Trump said American farmers will be happy with his trade deals and that China would be buying “billions of dollars” of soybeans. He gave no details on new purchases.
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