22.3 C
New York
Tuesday, June 6, 2023

Soy nears 10-year low on US-China trade row, crop weather

Soy nears 10-year low on US-China trade row, crop weather

CHICAGO: US soybean futures plunged to their lowest level in nearly a decade on Tuesday as escalating trade tensions between the United States and China, the world’s biggest soy buyer, prompted fund-driven selling, analysts said.

Corn and wheat followed broad declines in the commodity sector. Favorable weather in the Midwest bolstered corn and soy crop prospects, adding pressure.

Yet all three markets pared losses as bargain buying emerged at the day’s lows.

Chicago Board of Trade July soybeans settled down 19-1/2 cents at $8.89 per bushel after diving to $8.41-1/2, the lowest spot price on a continuous chart since December 2008.

CBOT July corn ended down 2-1/4 cents at $3.53-3/4 a bushel after hitting $3.38-3/4, a contract low. CBOT July soft red winter wheat finished down 12-1/4 cents at $4.77-3/4 a bushel after falling to $4.67-1/2, its lowest price since April 4.

Soybeans led the way down after US President Donald Trump threatened to impose a 10 percent tariff on another $200 billion of Chinese goods. China’s commerce ministry described the threat as “blackmailing” and said Beijing would fight back.

“It all comes down to what the big man wants to do with China,” said Dan Basse, president of AgResource Co, referring to Trump. “When you get in a fight with your biggest buyer of agriculture, and the world’s largest soybean buyer, even if (they) were to buy 20 percent less, it’s a big deal,” Basse said.

The CBOT July soybean contract has fallen about $1.30 a bushel or 13 percent so far this month and July corn is down about 40 cents or 10.2 percent, reflecting aggressive liquidation by commodity funds, analysts said.

“I think there is at least some chance that the lows are in for now,” said Rich Feltes, vice president for research with R.J. O’Brien.

“This morning was kind of a perfect storm of bearish news, between the crop ratings, 10 days of wet weather in the Midwest (and) Trump threatening even more tariffs on China. It’s hard to imagine that the news could get more bearish,” Feltes said.

The US Department of Agriculture late on Monday rated 78 percent of the US corn crop in good to excellent condition, up 1 percentage point from a week earlier, topping trade expectations.

The USDA rated 73 percent of the soybean crop as good to excellent, down from 74 percent the previous week, but still unusually high.

CBOT wheat faced seasonal harvest pressure, with the USDA reporting the winter wheat harvest as 27 percent complete, ahead of the five-year average of 19 percent.

Copyright Reuters, 2018

Source: Brecorder

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles