US soybean futures dropped to new contract lows on Wednesday, hitting the lowest settlement price for the market's most active contract since March 2009, as the escalating trade war between the United States and China stoked worries about long-term demand from the world's top importer of the oilseed. Fears about rising trade tensions with China hung over markets in general after Washington detailed products to be covered by a 10 percent tariff on an extra $200 billion worth of Chinese imports. China has vowed to strike back.
CBOT August soybeans futures hit a contract low, ending the day down 222-3/4 cents at $8.33 a bushel CBOT November soybean futures, the most actively traded contract, ended down 22-1/2 cents at $8.72 a bushel. Favorable crop weather in the US Midwest also weighed on soybeans, which hit contract lows on expectations for bumper harvests this season.
Traders said soybean prices were also pressured by a Wednesday report in Chinese media quoting the president of state grains trader COFCO as saying that China could increase soybean imports from other countries to reduce reliance on buying from the United States. China could increase soybean imports from South American countries, buy more rapeseed and sunflower seeds, or bring in more soybean meal, rapeseed meal, sunflower meal and fishmeal to fill any supply gaps, COFCO's Yu Xubo said in an interview with the Communist Party's official People's Daily paper.
Trade estimates for soybean exports: 200,000 to 500,000 metric tonnes for the 2017-2018 crop marketing year; 250,000 to 550,000 metric tonnes for the 2018-2019 crop marketing year.