Soybean prices plunged after Chinese new tax policy

Soybean prices plunged last Friday in Chicago after the announcement from China to increase the import taxes on agricultural products from the USA. However, the impact was moderate as traders already anticipated very low volumes of exports to China, Agritel writes.

"Before the G7 and hot topics on the agenda, markets were mixed on Friday (Aug. 23 – ed.). The major news has been of course the announcement by China of further tariffs that will increase the import taxes on the US soybean (5%) and cereals (10%)," the message says.

The announcement made by China weighed also on rapeseed prices and the front contract of Euronext lost -3 €/t despite of a stretched European balance sheet. The hydric deficit and hot temperatures currently in place in France and Germany could also complicate the 2020’s plantings.

"On the international stage, we can note the purchase of 65 000 t of Brazilian corn by Taiwan and 60 000 t of feed wheat sourced from the Black Sea by the Philippines. Today, the result of the Saudi tender in 780 000 t of feed barley should be known," Agritel adds.

Previously reported that 68% of soybeans in the US fields started setting pods vs. 90% last year as of August 18. On average over five years, 85% of soybeans in the US were at the R3 (Beginning Pod) growth stage at the reporting date.