US-Chinese Stress: Chicago soybeans closed at the lowest value in almost 11 years and affect the country

The soybean price on the Chicago Stock Exchange closed to its lowest level in nearly eleven years, because of the renewed tension between the United States and China over the trade war led by the two countries.

Last week, US President Donald Trump raised tariffs on Chinese goods from 10% to 25% to about $ 200 billion.

Today, China, which had already set 25% tariffs on soybeans in the United States, a country that was investing $ 15 billion in this oilseed market, has announced tariffs of 5% to 25%. % on June 1, 5140 products of the United States for about 60 billion dollars. The list includes everything from mutton and beef preparations to wheat flour.

In this context, soybeans from the May position in Chicago closed at $ 290.64 per tonne, a decrease of $ 2.20 per tonne. This is the lowest record since December 5, 2008, when it was listed at $ 287.89 US.

At the same time, the following position in July fell by $ 2.48 per tonne and ended at $ 294.87 per tonne.

Meanwhile, in the Argentine market, the May position has risen by $ 1 per ton to $ 215.50 per tonne.

The rise in the local price while Chicago has gone down is due to China concentrating more soybean purchases in Argentina and Brazil.

In its monthly report last Friday, the United States Department of Agriculture (USDA) forecast for the current cycle the total import of Chinese soybeans in 86 million tons, or less than 94.10 million tons. tons of the previous cycle.

Market impact

This is not only because of the impact of the trade war, but because of African swine fever which causes the loss of millions of pigs in China. This country is the largest producer in the world with more than 54 million tons, but its production reduced to less than 48 million tons because of this disease.

The USDA expects Brazil to export a total of 78.50 million tonnes of soybeans, while it estimates that in Argentina, in addition to exports of soybean meal, he will sell beans for 6.30 million tons.

Experts expect a significant impact on the country's foreign exchange earnings. According to Eugenio Irazuegui, from Zeni, since the beginning of the year, the official soy fob value has dropped by 12%. It went from $ 346 to $ 304 per tonne in 2019 accumulated.

A significant impact is expected both on foreign exchange earnings and collection by payroll deductions.