Chicago | Reuters—U.S. soybean futures sank 3.4 per cent on Friday to their lowest this year, after top importer China said it would impose additional tariffs of 34 per cent on all American goods in retaliation against duties announced by President Donald Trump.
The levies threaten to halt American soybean sales to Chinese buyers at a time when U.S. farmers are grappling with low crop prices and intense competition for export business from Brazil.
“Those kinds of tariffs put us not only out of the ball game but completely out of the ball game,” said Don Roose, president of brokerage U.S. Commodities in Iowa.
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Most actively traded soybean futures Sv1 finished 34-1/2 cents lower at $9.77 a bushel on the Chicago Board of Trade. The session low of $9.70-1/4 was the weakest price for a most-active contract since Dec. 20.
Trump on Wednesday unveiled a 10 per cent baseline tariff on all imports from April 5 and higher duties on other countries including 34 per cent on China, escalating the global trade war.
China’s latest duties are set to apply from April 10 and come on top of 10 per cent to 15 per cent tariffs Beijing slapped on roughly $21 billion worth of agricultural trade in March.
As a result, traders are on alert for potential cancellations of previous U.S. soybean sales. China has purchased about 600,000 metric tons of old-crop U.S. soybeans that have not yet been shipped, according to U.S. Department of Agriculture data, a low number for this time of year.
China typically buys more soybeans from top supplier Brazil at this time of year and increases American purchases in late summer when U.S. farmers start to harvest their crops.
“China is a major importer of U.S. soybeans and while their buying tends to shift to Brazil at this time of year, demand going forward could be heavily impacted,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.
Corn futures rose after Mexico, the biggest export market for U.S. corn, was excluded from Trump’s sweeping tariffs this week. China has not been buying much U.S. corn or wheat.
CBOT corn Cv1 closed up 2-3/4 cents at $4.60-1/4 a bushel, and wheat Wv1 dropped 7 cents to end at $5.29 per bushel.
—Additional reporting by Sybille de La Hamaide and Gus Trompiz in Paris; Naveen Thukral in Singapore; and Karl Plume in Chicago
