Soy falls as US-China talks loom, weather improves in Argentina

Soybeans fell in Chicago on worries that US-China trade tensions will reduce orders for US supplies and bearish weather in Argentina. 

US President Donald Trump signaled that talks with China over reciprocal tariffs imposed by both countries may be postponed, feeding concerns that trade relations may be strained for an extended period, according to Vinicius Ito, a director at futures and options brokerage Marex Group Plc. 

“There were rumours about a possible agreement with China to postpone the implementation of the tariffs, but the supposed conversation between Trump and Xi Jinping did not take place and this has somewhat discouraged the market,” Ito said in an interview. “In practice, we are seeing measures that escalate the trade dispute.” 

Grains rose on Tuesday after Beijing responded to Trump’s 10 percent levies on Chinese goods with tariffs that targeted US energy and farm gear but exempted crops. 

“Even though agricultural products are not targeted in Beijing’s countermeasures, the market is still quite worried over the uncertainty of future Sino-US relations,” said Rosa Wang, an analyst with Shanghai JC Intelligence Co Ltd, a China-based commodities consultancy.

Improved weather in Argentina’s soybean-farming regions added pressure to prices, Ito said. Rains have fallen on parched growing areas and there is more in the forecast, Angie Setzer, co-founder of farm advisory Consus Ag Consulting, wrote in a report. 

“Some of the recent moisture was under-forecasted, giving producers a welcome surprise that has helped to stabilize conditions in certain regions,” Setzer wrote. “Temperatures are expected to moderate in the coming days as well, helping to remove what locals had seen as the worst-case scenario.”