Soybeans are trading under US$8 per bushel
By Diego Flammini
Grain prices are down amid the continued trade war between the United States and China.
On Monday, China announced its intention to raise tariffs on several U.S. products. The import levies will range from 5 to 25 percent depending on the goods.
Those tariffs will come into effect June 1, China’s government announced.
This move comes in retaliation to Friday’s notification that the U.S. Trade Representative increased tariffs from 10 percent to 25 percent on US$200-billion worth of Chinese goods.
The U.S. plans to place more tariffs on Chinese products on Monday, Bloomberg reported.
As the federal governments of those two countries place additional tariffs on one another, trading prices in several markets are declining.
July and August soybean prices are trading for under US$8 per bushel as of mid-Monday morning, the Chicago Board of Trade says. Corn futures for July and September are around US$3.50 per bushel and wheat prices for July and September are hovering between US$4.25 and US$4.33 per bushel.
Barring a significant weather-driven crop hiccup, low ag commodity prices could be the status quo until the U.S. and China come to an agreement, said Abhinesh Gopal, head of commodity research with Farms.com Risk Management.
The trade war is the “real singular point of pressure on all of the ag markets,” he told Farms.com. “But, for all we know, this could all change tomorrow. The markets are very much news related. It’s uncharted territory as far as this trade war related market dynamic is concerned.”
Farmers are discouraged by the latest tariff exchange.
Each round of talks that goes by without a deal is detrimental to farmers, said Davie Stephens, president of the American Soybean Association.
“The U.S. has been at the table with China 11 times now and still has not closed the deal,” he said in a statement Monday. “What that means for soybean growers is that we’re losing. Losing a valuable market, losing stable pricing (and) losing an opportunity to support our families and our communities.”