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Soybeans Retreat From Latest Surge As China Keeps Import Quotas Unchanged

Summary:
Soybean futures are retreating from their latest surge on Tuesday after it was reported by local media that China is keeping its import quotas unchanged. While Beijing has pledged to purchase more US agriculture as part of the first phase of a trade agreement, this development throws a wrench into buying plans. The industry is also looking at forecasts that suggest the US will no longer be the world’s top soybean producer. March soybean futures tumbled %excerpt%.055, or 0.58%, to .3925 per bushel at 15:39 GMT on Tuesday on the Chicago Board of Trade (CBoT). Over the last month, soybean prices have surged nearly 5% on the US-China phase one agreement, they have slipped close to 2% to kick off the year. Speaking in an interview with Chinese financial news outlet Caixin, the vice minister

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Soybean futures are retreating from their latest surge on Tuesday after it was reported by local media that China is keeping its import quotas unchanged. While Beijing has pledged to purchase more US agriculture as part of the first phase of a trade agreement, this development throws a wrench into buying plans. The industry is also looking at forecasts that suggest the US will no longer be the world’s top soybean producer.

March soybean futures tumbled $0.055, or 0.58%, to $9.3925 per bushel at 15:39 GMT on Tuesday on the Chicago Board of Trade (CBoT). Over the last month, soybean prices have surged nearly 5% on the US-China phase one agreement, they have slipped close to 2% to kick off the year.

Speaking in an interview with Chinese financial news outlet Caixin, the vice minister of agriculture and rural affairs noted that import quotas for corn, rice, soybeans, and wheat will not increase. Han Jun, according to a CNBC translation of his Chinese-language comments, noted that Beijing maintains global quotas and it “will not adjust them just for one country.”

Chinese officials say they will import US agricultural commodities as part of the arrangement that is expected to be signed next week in Washington. It remains unclear as to how much China will be buying, but the reported provisions include Beijing acquiring up to $50 billion in American agriculture.

In other industry news, a recent study by the US Department of Agriculture (USDA)’s Foreign Agricultural Service suggests that Brazil will overtake the US as the world’s largest soybean producer during the 2019–2020 season. Brazilian output is projected to come in at 123.5 million metric tons (MMT), while the US yield is expected to be “less than 100 MMT in 2019–2020, a drop of almost 20% on the previous season.”

Since 1940, the US been the world’s top soybean producer, except in 1947 when China surpassed the US. Today, three countries account for 82% of the world’s output: the US, Brazil, and Argentina.

In other commodity markets, February corn futures dipped $0.005, or 0.13%, to $3.8425 per pound. February wheat futures shed $0.03, or 0.55%, to $5.47 a bushel. March orange juice futures rose 0.85 cents, or 0.86%, to 99.85 cents a pound.

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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

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