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Soybean Futures Climb 1% on Xi Jinping’s Comments

April 10, 2018 at 16:35 by Andrew Moran

Soybean futures are surging on Tuesday following Chinese President Xi Jinping speech that left a lot of investors smiling. The US and China have been involved in tense trade talks and Xi’s extension of an olive branch may just what the American soybean industry needs right now.

July soybean futures rose $0.125, or 1.19%, to $10.595 per bushel at 16:14 GMT on Tuesday on the US ICE Futures Exchange. Soybean prices have been rebounding since last week’s announcement that China was going to be instituting a tariff on soybean imports.

In a wide-ranging speech at the Boao Forum for Asia on Tuesday, the Chinese leader alleviated trade war fears by explaining that the world’s second-largest economy wants to boost imports, lower tariffs, loosen restrictions, and permit greater foreign investment. The remarks are in starch contrast to what the government has said in recent days.

Moving forward, Xi wants to reject arrogance and political powers to avoid the “Cold War mentality”:

The cold war and zero-sum mentality looks out of place in today’s world. Arrogance or only focusing one’s own interests will get nowhere. Only peaceful development and cooperation can truly bring win-win or all-win results.

President Donald Trump has not publicly commented on his counterpart’s statement.

The speech did not help the US dollar as the greenback shed 0.12%.

Despite the positive comments, traders will likely comb through the statements to discover clues on what to expect from the US and China talks pertaining to domestic agricultural shipments. Over the last several trading sessions, there has been immense volatility in the agricultural commodities market.

Last week, the Ministry of Commerce announced a 25% levy on soybean in addition to multiple US agricultural products, such as beefcorncotton, and wheat.

Year-to-date, soybean has advanced more than 8%. There had been fears that the list of tariffs could wipe out soybean’s gains.

May corn futures slid $0.05, or 0.37%, to $3.90 per pound. May cotton futures slipped 0.6 cents, or 0.07%, to 82.85 cents per pound. May orange juice futures dipped $0.005, or 0.04%, to $1.384 per pound. May wheat futures slumped $0.035, or 0.71%, to $4.875 a bushel.

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