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Soybeans Rise on Delay in Tariffs, Chinese Waivers Issuance

December 10, 2019 at 14:57 by Andrew Moran

Soybean futures are rising on Tuesday after it was reported that the US and China are working on a plan to delay the latest round of tariffs that are scheduled to go into effect on December 15. The agricultural commodity is also benefiting from Beijing issuing new tariff waivers as the country imports more US soybeans.

January soybean futures rose $0.0425, or 0.47%, to $9.015 per bushel at 13:41 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybeans have rallied more than 3% over the last five trading sessions, lifting their year-to-date gains to just under 1%.

American and Chinese trade negotiators are “laying the groundwork” to postpone the planned US tariffs on the remaining $156 billion in goods from Beijing, according to The Wall Street Journal. Quoting unnamed sources close to the situation, the newspaper is reporting that officials are having a tough time trying to encourage China to commit to greater purchases of US agriculture.

China has stated that it hopes to reach a trade deal before the new tariffs go into effect.

The world’s two largest economies seem unable to move beyond the first phase of a comprehensive trade agreement. The hurdle seems to be rolling back the retaliatory tariffs. Beijing wants to gradually eliminate the tariffs, while Washington is set on keeping the tariffs until the entire deal is established and ratified.

On Monday, Chinese soy importers purchased approximately 300,000 tons of soybeans for shipment in January and February. The news came shortly after the federal government extended new tariff waivers on at least one million tons. The importers already used up the 10 million tons in waivers that were given to them by Beijing in October. These waivers exempt importers from facing the 30% levies on US shipments.

In total, US soybean sales by China for the present September-to-August marketing year have topped 10 million tons. While this is far higher than the 455,000 tons that were purchased at the same time last year, they are still far less than the 21.5 million tons that were acquired in December 2017.

It should be noted that Chinese importers scooped up about 20 cargoes of Brazilian soybeans, taking advantage of the fresh crop. Unless China extends more duty waivers, the US may still have a tough time competing with Brazil in the soybean market.

In other agricultural markets, January corn futures edged up $0.0075, or 0.2%, to $3.765 per pound. February wheat futures were flat at $5.2275 a bushel. January orange juice futures climbed 0.15 cents, or 0.15%, to 97.30 cents a pound.

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

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