Soybean prices tumbled last week in Chicago, along with other key agricultural commodities amid rising trade tensions culminating in Friday’s announcements of new US and Chinese tariffs.
A bushel of soy for July delivery fell to $9.22 on Friday from $9.69 a week earlier after having earlier dropped to $9.03, the lowest level in a year.
Soybeans are a key US export to China, an economic tie that makes the back-and-forth between the US and China a source of anxiety throughout the American farming belt.
“The market realizes that the US has carried through what they threatened to do,” said Bill Nelson, senior economist at Doane Advisory Services, a research firm.
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US President Donald Trump announced tariffs of 25 percent targeting $50 billion in Chinese imports and China responded swiftly, saying it would impose equal tariffs on US products.
The Chinese government did not specify which goods will be targeted, but Beijing has previously threatened to impose a 25 percent tariff on American soybean imports.
The US move “is raising concerns that the Chinese will retaliate against soybeans,” said Dewey Strickler of Ag Watch Market Advisors.
Since US and China trade tensions began heating up in April, Nelson has seen no shift in Chinese demand for US soybeans. “We have to wait to see in the next few days if there are cancellations or diverting of ships,” he said.
Prices of other key farm commodities wheat and corn also fell this week in the wake of trade uncertainties.