CHICAGO, Ill. — U.S. soybean futures prices rose last week amid signs of easing trade tensions between Washington and Beijing.
However, they slipped late in the week after a White House official said he was less optimistic that a deal could be reached.
The rally was ignited by comments that U.S. President Donald Trump made in a post on Twitter, reversing earlier weakness stemming from sluggish corn and soybean export sales and worries about swelling soybean supplies as the U.S.-China trade war drags down demand. Both countries have placed tariffs on some of each other’s imports.
“All we’ve heard from Trump in the last three or four months has been more tariffs, more tariffs. This is the first time we’re hearing about progress and it’s coming from the highest level,” said Ted Seifried, chief agriculture market strategist for the brokerage firm Zanier Group in Chicago.
Trump said that, after a “very good” talk with Chinese President Xi Jinping, trade discussions were “moving along nicely” and that the two leaders would meet to discuss trade at the G-20 summit in Argentina this month.
Corn futures also climbed, lifted by expectations for a cut to the U.S. Agriculture Department’s U.S. crop forecast in a monthly report this week, while wheat edged up in tandem with firming corn.
Soybeans posted their steepest gain in four months on Nov. 1 following Trump and Xi’s telephone conversation. The rally contributed to the soy market’s strongest weekly advance since mid-August.
“Both presidents are putting out some optimistic vibes in terms of the potential for a trade deal,” said Terry Linn, analyst with Linn & Associates.
“Both sides are talking and the meeting is set up in just under three weeks,” Linn said Nov. 2.
“Maybe something will happen.”
Soybean price moves were volatile amid conflicting reports that Trump had asked his cabinet to draw up a China trade plan. The market pared gains after White House economic adviser Larry Ludlow later told CNBC that Trump had not asked for a plan and said he was less optimistic than he previously was about reaching a deal with China.
After markets closed Nov. 2, Trump told reporters at the White House that a lot of progress had been made with China on trade and predicted the two countries would reach a good deal.