Escalating trade tensions weigh heavily on CBOT crop futures

Source: Xinhua| 2019-08-25 04:45:47|Editor: Mu Xuequan
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CHICAGO, Aug. 24 (Xinhua) -- Chicago Board of Trade (CBOT) soybean and corn futures ended this past trading week with sharp losses amid escalating U.S.-China trade tensions.

The most active corn contract for December delivery was down 13 cents, or 3.41 percent week on week, to close at 3.6775 dollars per bushel on Friday. November soybeans were down 23.25 cents, or 2.64 percent, to settle at 8.565 dollars per bushel. December wheat was up 0.25 cent, or 0.05 percent, to close at 4.7775 dollars per bushel.

China announced on Friday that it will impose additional tariffs on U.S. imports worth about 75 billion U.S. dollars, including soybeans, peanuts, seafood, chicken, fruit, vegetables and crude oil.

A total of 5,078 U.S. items will be subject to additional tariffs of 10 percent or 5 percent, which will be implemented in two batches and take effect on Sept. 1 and Dec. 15 respectively, according to the Customs Tariff Commission of China's State Council.

China said the imposition of additional tariffs is a forced response to U.S. unilateralism and trade protectionism.

Davie Stephens, president of the American Soybean Association, said on Friday that the prolonged and escalated trade tensions with China means "worsening circumstances for (U.S.) soy growers who still have unsold product from this past season and new crops in the ground this season."

CBOT soybean futures, which traded sharply lower at the beginning of the week as recent rains eased dryness in the crop growing Midwest, fell further due to worsening trade situation.

And the fall of soybean prices spilled over to corn market.

Unlike corn and soybeans, CBOT wheat futures ended the week steady.

The U.S. Department of Agriculture on Thursday released its weekly export sales report for the period of August 9-15. Wheat sales stood at 595,500 metric tons, beating the trade's expectations of between 250,000 and 500,000 metric tons.

However, ample inventory and fierce competition from European and Black Sea wheat exporters pressured CBOT wheat prices.

In a monthly supply and demand estimates report, the U.S. Department of Agriculture projected greater domestic wheat supplies and higher ending stocks for the 2019/20 marketing year.

Early this week, Black Sea wheat prices started to decline and are currently around 190 dollars per metric ton. Market analysts said that increasing competition between the European Union, Ukraine and Russia would probably dent any CBOT wheat rally.