Soybean price reaction has remained subtle as the China-US trade tiff continues to grow.
Moves in futures prices were more telling in China where Dalian soybeans for May added 0.9% to 3,749 yuan a tonne, their highest close in nearly four months, while May soymeal gained 1.1% to 3,026 yuan a tonne, as buyers sought to secure supplies.
About $60billion in Chinese goods were targeted with tariffs in a memorandum signed by Donald Trump, U.S. President, expected to into effect after a 30-day consultation period that begins once the list is published.
Early Friday, China responded with a list of $3 billion in U.S. goods that it would target if no agreement was reached including pork, steel pipes, and wine, but there was no immediate mention of soybeans.
While it could be argued that the Chinese tariffs on imports from the US and Beijing unveiled in a list of goods from ginseng to steel, pork, fruit, ethanol, wine and dried nuts on which duties have been planned, could open up opportunities for other origins, the initial market focus was on the uncertainty and the dent to global economic growth prospects.
A higher profile potential target is soybeans which China is the top importer, and the US the second-ranked exporter but the oilseed, analysts estimate may escape Beijing sanctions because there are not enough non-US supplies to feed China’s appetite.
“If China were able to buy all of Brazil’s soybean production which they can’t, it would push other buyers to the US and buy 7m-8m tonnes from other South American origination points, they would still need to buy over 20m tonnes to reach their target of 100m tonnes of soybean imports next year,” Benson Quinn Commodities said.
Meanwhile Chicago soybean futures eased modestly by 0.25 cents to $10.29 a bushel in Chicago for May delivery, crossing back above their 40-day moving average.
Soymeal, which is less of China’s import and which has become more of a barometer of weather woes in Argentina, eased 0.1% to $367.60 a short ton.