BEIJING – Chicago soybean futures firmed on Tuesday supported by a softer dollar, although escalating US-China trade tensions kept prices near year-to-date lows.
Market participants, however, are growing hopeful that the latest tariff threats may be scaled back in the near future.
The most-active soybean contract on the Chicago Board of Trade (CBOT) rose 0.51 percent to $9.88 a bushel.
On Monday, US President Donald Trump threatened an additional 50 percent tariff on Chinese imports starting Wednesday unless Beijing withdraws its 34 percent retaliatory tariff on the United States following Trump’s “reciprocal” duties.
China’s Ministry of Commerce on Tuesday pushed back, saying it would never accept what it called the “blackmail nature” of US actions and vowed to take countermeasures if needed.
Trade tensions dragged soybeans to $9.70 a bushel last Friday, their lowest level this year.
Ole Houe, director of advisory services at IKON Commodities in Sydney, said traders are gaining confidence that the tariffs may be watered down in the coming weeks.
“The talks Trump had with Vietnam and the vaguely outlined ‘concessions’ reportedly agreed upon combined with harsh domestic backlash in the US, now reaching Wall Street, have led traders to believe this may be just another brief episode of tariff posturing,” Houe said.
