Chicago soybeans and corn bounced back on Wednesday, recovering form their lowest levels since early January, although worries over escalating trade tensions between the United States and its key trading partners capped the upside.
Wheat gained ground, rising for the first time in eight sessions.
“Soybean levies will only push China further towards South American supply,” ING said in a note. “Seasonally, this is a time when China relies more heavily on Brazilian supply.”
The most-active soybean contract on the Chicago Board of Trade (CBOT) added 0.3% to $10.02 a bushel, as of 0503 GMT, and corn added 0.9% to $/4 a bushel. Wheat was up 0.4% at $/4 a bushel.
All three products had dropped to their lowest since early January on Tuesday amid trade tensions between the world’s top exporters and importers of agricultural goods.
U.S. President Donald Trump slapped 25% tariffs on imports from Mexico and Canada on Tuesday, and doubled duties on Chinese goods to 20%.
Ottawa responded with 25% tariffs on more than $20 billion in U.S. imports, while Beijing said it would impose additional tariffs on American agricultural and food products from next week. Mexico’s government is expected to respond on Sunday.
Trump’s new tariffs threaten to hurt the $191 billion American agricultural export sector and raise costs for farmers struggling with low crop prices.
Some traders and analysts said short-term export flows to China may not be significantly altered, with an advancing Brazilian soybean harvest expected to absorb the bulk of Chinese demand in the coming months.
Commodity funds were net sellers of CBOT wheat, soybean, soyoil, corn and soymeal futures contracts on Tuesday, traders said.
Source: Reuters
