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Soybean Gains on Higher Chinese, EU Imports

January 23, 2019 at 17:58 by Andrew Moran

Soybean futures are rising midweek as the commodity wiped out Tuesday’s losses. One day after it was reported that US-China trade talks have hit a snag, new data is helping US soybean prices regain momentum. Soybean is looking to kick off 2019 with a bang.

March soybean futures tacked on $0.045, or 0.49%, to $9.1375 per bushel at 16:26 GMT on Wednesday on the Chicago Board of Trade (CBoT). Soybean, which is up more than 2% year-to-date, has climbed to a two-week high.

According to the US Department of Agriculture (USDA), soybean exporters loaded six vessels bound for China, the biggest weekly shipment since the beginning of the trade war between the world’s two largest economies. In the week ending January 17, an estimated 416,480 tonnes of soybeans were loaded onto four ships in the Pacific Northwest and two vessels at US Gulf Coast terminals.

The US government reported that these are the first shipments to head to Beijing since the nation bought about five million tonnes when the 90-day trade truce was established.

US farmers have been suffering since tit-for-tat retaliatory tariffs became the norm this past summer. Many companies reported rotting inventories, surging storage costs, and even insolvency. But the industry could experience a turnaround from Beijing’s pledge that it would buy US soybeans as part of both sides’ efforts to end trade tensions and reach a new agreement.

China did attempt to wane off American soybeans, but it did not work. Brazil failed to keep up with demand, and China’s five-year plan to boost domestic output could not work because of the country’s African swine flu outbreak.

Meanwhile, the European Union (EU) increased its soybean imports by 112% in the second half of 2018. The US, which is the trade bloc’s biggest supplier of soybeans, engaged in trade talks this past fall to alleviate the trade spats, resulting in the European leadership to agree to buy soybeans.

In other agricultural commodities, March corn futures dipped $0.05, or 0.13%, to $3.785 per pound. March wheat futures added $0.0175, or 0.34%, to $5.23 a bushel. March orange juice futures tumbled $0.065, or 0.55%, to $1.1185 per pound.

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