Soy Shrugs Off China’s Tariff Cut as Traders Want to See Sales
· The reduction is “something, but it’s not a game-changer”
· Hog futures jump as duties are also lowered on U.S. pork
By Michael Hirtzer, Bloomberg
February 6, 2020
Soybean futures traded with little enthusiasm in a lackluster response to China’s decision to cut retaliatory tariffs on American imports along with other agricultural commodities. Meanwhile, hogs jumped as traders were more optimistic for U.S. pork sales to the Asian nation as it suffers from an epidemic of African swine fever.
“It’s something, but it’s not a game-changer,” Don Roose, president of U.S. Commodities in Iowa, said of the tariff cut. “And they continue to buy cheaper beans from South America.”
Soybeans for March delivery erased earlier gains to slide as much as 0.4% to $8.7675 a bushel.
Beijing announced Thursday that it will halve additional tariffs on some $75 billion of imports later this month. With the earlier retaliatory duty remaining in place, it still means U.S. soybeans will be subject to a 27.5% tariff, down from 30% previously. Punitive tariffs on American pork, chicken and beef imports were reduced to 30% from 35%.
Brazil is harvesting a massive soy crop, which has helped to steal the march from the U.S. after the county signed a partial trade deal with China on Jan. 15. While China pledged to buy billions of dollars worth of American farm goods, it also said purchases have to make economic sense.
China’s tariff reduction, effective Feb. 14, will coincide with a cut by Washington to duties on some Chinese products. Both nations have said they will scale back levies on each other’s goods as part of the phase-one deal.
Still, China continues to turn to Brazilian shipments...
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