Soybeans Slip as China's Tariff Relief Skips US Crop
Soybeans traded near a one-month low after China's tariff-cut list excluded the crop, while wheat hovered near a six-week trough.
Soybean futures extended losses on Tuesday, hovering close to a one-month low, after China's proposed tariff reductions on US farm goods left the oilseed off the list. The exclusion disappointed traders who had hoped last week's summit between the two countries' leaders would open the way for relief on the top US agricultural import into China.
The most-active Chicago Board of Trade soybean contract slipped 0.3% to $12.84-3/4 a bushel by 0034 GMT, having touched its weakest level since August 31 in the prior session. The tariff-reduction list, issued jointly by China's commerce ministry and the White House, covers a wide range of American agricultural products — corn, wheat, meat and dairy among them — but not soybeans. That omission means US soybeans would still carry an extra 10% duty, a burden traders have said private importers cannot absorb, even as Chinese state buyers have increased purchases.
Wheat also weakened, shedding 0.4% to $6.86-1/4 a bushel, not far from Monday's lowest since August 19. Prices have been pressured by diplomatic efforts to reduce disruptions to Black Sea exports, even as daily attacks continue in Russia's 4-1/2-year war with Ukraine. Ukrainian President Volodymyr Zelenskiy said on Friday that India, Turkey, Egypt and other Middle Eastern countries were involved in talks on unblocking shipping in the Black Sea, while Turkey has put proposals to Moscow on shipping security. An analysis of industry data indicated Russia could quickly restore up to 80% of its Black Sea grain terminal capacity if diplomatic efforts to halt mutual attacks lead to a ceasefire.
Corn gave up 0.3% to $5.21-1/4 a bushel. The US Department of Agriculture said on Monday that farmers had harvested 18% of the corn crop and 17% of soybeans, matching the average pace of the past five years. In Europe, crop-monitoring service MARS lowered its yield forecasts for maize and sugar beet in the EU, saying rainfall arrived too late to undo damage from summer heat and drought.
On broader markets, major stock indexes fell on Monday as oil edged higher and Treasury yields extended recent gains ahead of further expected interest-rate hikes from the Federal Reserve in the coming months.