Soybeans Pauses Ahead of the Argentina G20 Meeting


Soybeans has been at the forefront of the ongoing trade conflict between the United States and China. The US is the biggest soybeans exporter in the world, exporting more than $108 million metric tonnes of the commodity. It is followed by Argentina and Brazil, which export 86 million and 53 million tonnes annually. China on the other hand is the biggest soybeans importer. It imports two thirds of the commodity from the United States. Because of the weather and other geographical reasons, the US and South American crops harvesting season is in different months. This makes it difficult for China to replace American soybeans with those of other countries.
YTD, the price of soybeans has dropped by almost 10% and since August, the commodity has continued to trade within a narrow range as shown below. Because of the important nature of US and China relations has to do with soybeans, traders are paying close attention to the upcoming meetings between the United States and China. Interestingly, the meetings will happen in Argentina, another important soybeans country. A successful meeting between the two leaders will provide an important support for the commodity. This is because of the increased demand for American soybeans that China could order.
Yesterday, Trump lowered the expectations for the upcoming talks. In an interview with the Wall Street Journal (WSJ), he said that he did not expect the talks to yield anything. He also said that more tariffs were expected to come in January. Such measure will be disastrous for soybeans because China could even halt the purchase. With a lot of soybeans in the US, such a measure will likely depress the price.
The post Soybeans Pauses Ahead of the Argentina G20 Meeting appeared first on Forex.Info.

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