This morning, CBoT soybean futures prices are falling again, reaching a monthly low. More and more market participants doubt that China will not purchase as many US soybeans as promised in the Phase 1 deal signed yesterday.
The agreement is intended to reduce the punitive tariffs and thus the tensions between the US and China. In the agreement, China promises to buy more US goods at market conditions.
However, following the outbreak of African Swine Fever (ASF) in China more than 18 months ago, the national pig population there has fallen so much that less soybean meal is now needed. Traders in Australia are writing this morning that there is little upside left.
The key message in the Phase 1 deal is that China will buy at least USD 200 billion from the US over the next two years. US agricultural commodities are expected to account for 40-50 bn p.a.
Commodity funds reduced their long positions in CBoT soybean futures yesterday.
Source
HANSA Terminhandel
