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Soybean Dips Amid Rising Chinese Imports, EU Targeting Ag

April 26, 2019 at 16:16 by Andrew Moran

Soybean futures are slumping to their lowest levels of 2019 at the end of the trading week. Despite some bullish news that would typically help the agricultural commodity, soybean prices are tumbling on ample global supplies and trade war woes, which could be the new norm for the next couple of years.

July soybean futures slipped $0.02, or 0.23%, to $8.7075 per bushel at 15:37 GMT on Friday on the Chicago Board of Trade (CBoT). Soybean prices, which have fallen more than 5% so far this year, are on track for a weekly decline of 2.6%. Soybean is now trading at its worst point in 2019.

China’s imports of soybeans from the US rose in March. According to new data from the General Administration of Customs, the world’s second-largest economy imported 1.51 million tonnes of soybean from the US, up from 907,545 tonnes in February. Beijing also imported 2.79 million tonnes of soybeans from Brazil, which has become its biggest supplier, up from 2.33 million tonnes in March.

In total, March soybean imports totaled 4.92 million tonnes.

Although this is a positive trend for soybean farmers, the imports were only half of last year’s volumes. The development is being driven by two primary issues: China’s tariffs on US cargoes and declining purchases because of the African Swine Fever breakout that has affected livestock.

What should concern US farmers is the European Union confirming that it will not include agriculture in trade negotiations. The European Commission was given the OK from the EU about excluding agriculture in trade talks, choosing to only eliminate tariffs on industrial products. Predictably, this perturbed the US government as President Donald Trump revealed to reporters that he told European officials “you can’t treat our farmers that way.”

Ostensibly, Canadian farmers will reduce their share of the soybean market in the coming years, notes Statistics Canada. The report found that farmers are shying away from soybeans and lentils and planting more acres of corn, dry peas, oats, and wheat.

In other agricultural markets, July corn futures rose $0.045, or 1.26%, to $3.6175 per pound. July wheat futures edged up $0.02, or 0.45%, to $4.435 a bushel. July orange juice futures tacked on $0.013, or 1.24%, to $1.035 per pound.

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