The announcement of tariff cuts by China and the United States was the fuel that the soybean market was waiting for. Soybean futures oilseed rose sharply on Monday morning (12) on the Chicago Stock Exchange. Prices recorded gains of more than 1% — between 15.50 and 16.25 points in the main contracts. The July contract was traded at US$ 10.60 and the September contract at US$ 10.42 per bushel.
The joint statement from the world's two largest economies shook up all markets and hit soybeans hard. In addition to being at the heart of the trade conflict, there was a lot of anticipation among traders regarding the start of the agreement. They were trying to understand what demand for North American soybeans would be like, especially with a new crop being planted.
Thus, not only soybean prices are rising, but also oil prices – which have a gain of over 2.5%, also driven by the strong increases in oil prices – and bran, as well as wheat and corn. The news has affected all markets worldwide.
China and the US have agreed to drastically reduce tariffs for a significant 90 days. Thus, US tariffs will fall to 30% and Chinese tariffs to 10%.
The soybean market, however, does not only monitor the complex global trade scenario. It also closely monitors the weather in the American Midwest, the development of planting in the region and the conclusion of the harvest in South America. In this context, the pace of sales in Brazil and Argentina stands out.
Furthermore, this Monday, at 1 pm (Brasília time), the USDA will release its new monthly supply and demand bulletin, updating the old harvest and reporting the first figures for the new harvest, which should also bring more volatility to the market.
Source: Carla Mendes | Notícias Agrícolas
