Soybeans tumble to decade lows on US-China trade dispute

2018-07-11 20:13:05 GMT (
Soybeans tumble to decade lows on US-China trade dispute

Soybean futures tumbled nearly three percent to December 12, 2008 lows in American trade, as the dollar index muscled up, following earlier data from the US, the world's largest soybean producer and exporter, and after the US threatened a 10% tariff on $200 billion worth of Chinese imports. 


As of 07:34 GMT, soybean futures due on November 15 fell 2.67% to $8.4825 a bushel from the opening of $8.7150, marking decade lows, while the dollar index rose 0.60% to 94.72 from the opening of 94.16, touching July 3 highs. 


US Data


Earlier US data showed producer prices rose 0.3% in June, slowing down from 0.5% in May and beating estimates of 0.2%, while core prices rose 0.3%, same as before and also beating forecasts of 0.2%. 


The final reading for wholesale inventories showed a 0.6% increase, up from 0.5% in the preliminary reading, and 0.1% in April. 


US-China Trade Dispute 


Mounting trade tensions between US and China, the world's largest soybean importer, are casting shadows over soybeans, which hit successive decade lows. 


US trade representative Robert Lighthizer said a suggested 10% tariff on Chinese products will take up to two months for deliberation to allow public discussion before going into effect. 


China imposed tariffs ranging from 33.3% to 78.2% on US optical fiber products this week to counter flooding the market with these imports, up from 4.7% to 18.7% in previous rates. 


That comes after US imposed a 25% tariff on $34 billion worth of Chinese products last Friday, with China responding with similar ones. 


China is the largest soybean importer from the US, with total purchases amounting to $14 billion, while analysts expected that US farmers will take some time to feel the hit as China wouldn't switch providers immediately. 


In the same thread, China's efforts to be self sufficient when it comes to grain harvest over the last two decades didn't pan out as hoped, with China still importing 90% of its consumed soybeans last year (or about 100 million tonnes). 

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