The soybean market was shaken by the political escalation between the US and China at the end of last week. A threat by the US president to impose punitive tariffs caused prices to slide significantly on Friday. Although the situation quickly calmed down following diplomatic attempts at de-escalation, confidence in an imminent normalization of bilateral trade remained fragile. Share prices reacted with corresponding restraint, even after the USDA reported export inspections of just under one million tons. The figures were well below the previous year's level, underlining the structural weakness of US soybean exports. This was compounded by renewed political pressure from President Trump, who publicly criticized China's refusal to buy and raised the possibility of import restrictions on cooking oil. With China threatening tariffs and restrictions on rare earths, there is growing concern that the soy complex will no longer be at the center of the upcoming negotiations.
Fundamental impetus came from Brazil. A record acreage was reported there and production estimates also remain at record levels. Nevertheless, high premiums made China less willing to buy. Market observers expect that Beijing will have to draw on state stocks in the medium term if it continues to refrain from importing from the USA. Processing capacity in the USA has recently increased significantly, which is reflected in strong NOPA figures. Soybean meal prices benefited from this, while soybean oil reacted only cautiously across the board.
On the rapeseed market, Euronext was able to recover after the start of the week, but lost ground again at the end of the week. Canola futures showed a similar trend. Hopes for a normalization of trade between Canada and China provided a temporary boost, but were curbed by profit-taking and global price pressure towards the weekend.
ZMP Live Expert Opinion
The geopolitical situation remains the key risk for the soybean market. Although the escalation between Washington and Beijing has been defused for the time being, Trump's statements show how quickly new unrest can arise. At the same time, the outlook for Brazil's record harvest is depressing sentiment. Even stable processing figures in the USA and a positive trend in soybean meal are currently not enough to establish a clear upward trend. Short-term hopes of an easing of trade relations between Canada and China were dampened at the end of the week. Overall, the oilseed market remains highly susceptible to political and fundamental fluctuations.
You see historical data because you're not logged in or not a ZMP Live+ member. Get your information advantage now!
