Soybean futures are settling lower on Tuesday as fears that the Wuhan coronavirus outbreak could threaten the US-China phase one trade agreement. Since peaking at .56 early last month, soybean prices have been tumbling, and they have not climbed above the key mark in nearly a month. Will 2020 be another roller coaster ride for the agricultural sector? March soybean futures fell %excerpt%.0225, or 0.25%, to .915 per bushel at 19:02 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybeans have dropped nearly 7% so far this year, and they pared all of their gains from over the last 12 months. The US-China interim trade deal took effect on Friday, and the Chinese government is already starting to live up to the provisions of the pact. Despite China taking an economic and health beating
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Soybean futures are settling lower on Tuesday as fears that the Wuhan coronavirus outbreak could threaten the
March soybean futures fell $0.0225, or 0.25%, to $8.915 per bushel at 19:02 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybeans have dropped nearly 7% so far this year, and they pared all of their gains from over the last 12 months.
Despite China taking an economic and health beating from Covid-19, Beijing is trying to fulfill commitments it made in its phase one trade deal with Washington. On Tuesday, China confirmed that it is granting exemptions on retaliatory tariffs that were slapped on 696 American products. This represents the biggest tariff relief so far as the country has already instituted two other rounds of exemptions. The leadership promised that more will be announced in the coming months.
The biggest question mark moving forward is if China will be able to buy $200 billion in US goods and services over the next two years, including $50 billion in agriculture. The levy exemptions are being applied to pork, beef, and soybeans. But can Beijing purchase that much agriculture in the middle of the coronavirus epidemic?
White House economic adviser Larry Kudlow recently revealed that President Xi Jinping told President Donald Trump that China will continue to meet the targets inside phase one. Even if that were so, one trader told Reuters that importers will still buy soybeans based on market conditions unless mandated by the government. This means that many firms would return to Brazil because of the nation’s supply of
Brazil’s national crop agency reported the country’s soybean exports could hit nine million metric tons this month, up 80% year on year as harvesting balloons and the real’s value has declined % in February.
In other agriculture commodities, April corn futures picked up $0.0475, or 1.26%, to $3.825 per pound. April wheat futures surged $0.2425, or 4.47%, to $5.67 a bushel. March orange juice futures edged up 0.25 cents, or 0.25%, to 98.95 cents a pound.
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