Chicago | Reuters — U.S. soybean and corn futures posted losses for the fourth straight week on worries about the escalating trade dispute between the U.S. and China, although prices rose for the day on Friday as some traders covered short positions.
Soybeans ended 1.2 per cent lower on the week, after plunging to their lowest price in nearly a decade on Tuesday after U.S. President Donald Trump threatened more tariffs on $200 billion of Chinese goods (all figures US$).
Traders are focused on the trade tensions because the U.S. exported $12.4 billion worth of soybeans to China last year, making it the single most valuable U.S. agricultural export product to the Asian nation.
Trade jitters have rattled agricultural markets over the past two weeks amid worries that China, which is also the largest importer of U.S. pork and cotton, would slow or halt purchases of those and other U.S. farm goods.
“It is doubtful that the soybean market can go too far on the upside until some of the trade issues with China are resolved,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
The Chicago Board of Trade November soybean contract rose 1.6 per cent on Friday to $9.16-1/4 per bushel. Still, the contract, which represents the crop that will be harvested this autumn, has lost 11.4 per cent this month.
“It’s a market that’s just trying to recover from oversold levels,” said Don Roose, president of Iowa-based broker U.S. Commodities.
U.S. soybean and corn crops have generally benefited from wet and warm growing conditions so far, further pressuring prices. But now some analysts are considering whether the ground is too wet in some areas.
“More rains are in the forecast which is concerning as grounds are already saturated,” said Karl Setzer, risk management team leader for MaxYield Cooperative in Iowa.
CBOT corn ended little changed at $3.57-1/4 a bushel on Friday and down 1.1 per cent for the week. Wheat slipped 0.8 per cent to $4.91-1/4 a bushel and was down 1.7 per cent for the week.
Exporters struck a deal to sell 131,300 tonnes of U.S. corn to Mexico, mostly for delivery in the 2018-19 marketing year, according to the U.S. Department of Agriculture. They separately sold 117,000 tonnes to Panama during the 2018-19 marketing year.
Next week, traders will digest U.S. acreage and stocks estimates from USDA on Friday.
— Tom Polansek reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.