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Soybeans Rally on Reports of US Aid Package to Farmers

July 24, 2018 at 16:08 by Andrew Moran

Soybean futures are rallying on Tuesday after it was reported that the US government will offer an aid package to farmers affected by the brewing trade war between the US and the rest of the world. Over the last three months, the commodities market has been beaten and battered as nations impose retaliatory tariffs, targeting US agriculture.

November soybean futures surged $0.1025, or 1.19%, to $8.73 per bushel at 16:29 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean prices have edged higher in recent trading sessions, advancing more than 2%, but they are still down 15% over the last three months.

Speaking to two sources close to the situation, Politico is reporting that President Donald Trump and his administration will announce a $12 billion aid package to farmers impacted by tariffs. The White House is anticipated to propose two commodity support programs and use the US Department of Agriculture (USDA) to stabilize the domestic agricultural economy.

The announcement has been expected for the last couple of months as President Trump has promised farmers on several occasions that “help is on the way.”

In 2018, a wide array of US farmers, from soybeans to oranges to cattle, have been victims of the trade war. China, the world’s biggest consumer of US soybeans, has slashed its purchases of the commodity. The European Union (EU) has reduced its acquisitions of US orange juice. The Mexican government confirmed last month that it will decrease its purchases of pork by $1.1 billion.

According to Reuters, Brazil is projected to become a soybean heavyweight over the coming year amid trade spats between the US and China. The newswire notes that the area planted with soybeans in the South American nation is expected to balloon as much as 5% for the 2018–2019 crop season.

In other agricultural commodities, December corn futures slipped $0.03, or 0.81%, to $3.682 per pound. September wheat futures shed $0.0275, or 0.54%, to $5.11 a bushel. September orange juice futures dropped $0.085, or 0.51%, to $1.675 per pound. September coffee futures plunged $0.0115, or 1.03%, to $1.105 a pound.

If you have any questions and comments on the commodities today, use the form below to reply.

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