Soybeans at 2-Week High; Tariff Waivers Supported by China
Soybean futures increased for a fifth straight session to their highest. This is nearly two weeks after China said it would waive import tariffs for soybean and pork shipments.
Wheat lost ground after closing slightly higher, while corn rose.
The most active soybean deal on the Chicago Board of Trade increased 0.3% to $8.92-1/2 a bushel. It rose in the recent session to its highest since Nov. 26 peak at $8.94-1/4 a bushel.
Wheat commodities decreased by 0.2% at $5.23-1/4 a bushel, while corn surged 0.1% at $3.77 a bushel.
The Director of Agricultural Strategy at CBA said the market is getting help by China, granting tariff waivers on imports of United States soybeans.
The tariff waivers by China were established on applications by individual firms, according to the finance ministry.
U.S. traders and farmers’ wish negotiations will ease the trade war and raise Chinese buys of American agricultural goods. The tariff waivers are a good sign, according to the White House’s economic adviser.
China’s November soybean imports bounced from a year ago as shipments from the U.S. booked during a cease-fire in the U.S.-China trade war.
China imported 8.28 million tons of soybeans in November, increased 54% from 5.38 million tons a year ago as U.S. soybean cargoes came.
Canadian farmers produced the weakest canola crop in four years, less than expected. This is after unusual wet autumn weather that left millions of plots unharvested.
Farmers produced 18.6 million tons of canola, decreased 8% from last year. Also, 1 million tons less than the total trade guess before the report. Canada is the world’s biggest exporter and producer of canola.
Large speculators decreased their net short position in CBOT corn futures in the week to Dec. 3.
Soybeans Rebound as China Trade Talks Move Forward
In commodity news today, soybeans are breaking out of decline as officials signal optimism that China and U.S. will reach a trade agreement.
Futures increased 1.4% this week, heading for the first gain in more than a month. Prices had neem floundering almost a two-month low as the two countries appeared at a dilemma in negotiations. It may prove key to future demand for American farm products such as soybeans.
The countries are working toward an agreement before a Dec. 15 deadline for more tariffs. Also, U.S. National Security Adviser said that Washington is close to reaching a first trade deal. On the other side, China began to process applications from some domestic firms to exempt purchases of U.S. goods like soybeans and pork.
An analyst at Commerzbank AG said it remains to be seen how quickly soybean imports from the U.S. get back if an initial trade deal is a sign.
Soybeans for January delivery increased 0.5% to $8.88 a bushel, climbing for a fourth straight day. Also, soybean meal futures headed for the biggest weekly increase since June.
Soybeans prices remain marginally lower for the year – on progress for a third straight year loss. Large South American harvests appear in the coming months, increasing competition for American supplies. Also, the U.S. Department of Agriculture will update its global crop reports next week. Analysts expect slightly bigger visions for both Brazil and Argentina.
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