Monday , February 17 2020
Home / Commodity Blog / Soybeans Settles Lower Despite US-China Phase One Deal Signed

Soybeans Settles Lower Despite US-China Phase One Deal Signed

Summary:
Soybean futures are setting lower midweek, despite the US and China officially declaring a truce and signing phase one of an overall comprehensive trade agreement. Soybean prices have had a rough start to 2020 on mild uncertainty over Beijing’s planned acquisition of American agriculture with some arguing that it will be hard for the world’s second-largest economy to live up to the agreement’s provisions. March soybean futures finished the Wednesday trading session down %excerpt%.135, or 1.43%, to .2875 per bushel on the Chicago Board of Trade (CBoT). Soybeans prices are down nearly 3% two weeks into the new year and it is unclear which near-term direction they will travel with the two sides moving ahead with phase one. On Wednesday, President Donald Trump and Vice Premier Liu He signed

Topics:
Andrew Moran considers the following as important:

This could be interesting, too:

Andrew Moran writes Soybeans Reverse Skid as US Export Inspections Post Weekly Surge

Andrew Moran writes Soybeans Extend Skid As Prices Hit One-Month Low on Coronavirus Fears

Andrew Moran writes Soybeans Slide As Commodity Still Cannot Benefit From US-China Trade Pact

Andrew Moran writes Soybeans Retreat From Latest Surge As China Keeps Import Quotas Unchanged

Soybean futures are setting lower midweek, despite the US and China officially declaring a truce and signing phase one of an overall comprehensive trade agreement. Soybean prices have had a rough start to 2020 on mild uncertainty over Beijing’s planned acquisition of American agriculture with some arguing that it will be hard for the world’s second-largest economy to live up to the agreement’s provisions.

March soybean futures finished the Wednesday trading session down $0.135, or 1.43%, to $9.2875 per bushel on the Chicago Board of Trade (CBoT). Soybeans prices are down nearly 3% two weeks into the new year and it is unclear which near-term direction they will travel with the two sides moving ahead with phase one.

On Wednesday, President Donald Trump and Vice Premier Liu He signed the first phase of the US-China trade pact. As part of the agreement, China will purchase $200 billion in American products over the next two years, including $50 billion in agriculture. It is unknown how much of it will be allocated to soybeans, but since China is the world’s top consumer of the agricultural commodity, it is possible that at least half will be directed to soybean purchases.

The US will cut its 15% tariffs on $110 billion in Chinese products in half, but the White House will leave the 25% tariffs on $360 billion in Chinese goods alone.

Many analysts have expressed doubt that China would be able to buy that much agriculture in just two years. This provision would mean the country would need to ramp up its agricultural imports by as much as 230%. Is this doable? It needs to be if Beijing wishes to avoid trade strife. Last year, overall imports from the US cratered 20.9% from the previous year.

A new report from an agricultural consultancy firm projects Brazil’s soybean output will hit a record 123.9 million tons in the 2019–2020 season. According to AgRural, sufficient rainfall is helping the country increase its soybean yield. Meanwhile, the US Department of Agriculture (USDA) anticipates Brazil will export 76 million mt of beans in the 2019–20 marketing year.

In other commodity markets, March corn futures dipped $0.02, or 0.51%, to $3.00 per pound. March wheat futures added $0.0525, or 0.92%, to $5.7375 a bushel. February coffee futures edged up 0.10 cents, or 0.09%, to $1.114 a pound.

If you have any questions and comments on the commodities today, use the form below to reply.


© AndrewMoran for Commodity Blog, 2020. | Permalink | No comment | Add to

Better Feed from Ozh

Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

Leave a Reply

Your email address will not be published. Required fields are marked *