Quick overview

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US soy futures fell following President Donald Trump’s announcement that he would delay his trip to China for trade negotiations. Trump announced that his meeting with Chinese President Xi Jinping would now take place in “about five or six weeks,” instead of the end of March as originally scheduled.

 

Trump had previously indicated that he was considering delaying the trip because of the conflict with Iran. Any new trade agreement between Trump and Xi is anticipated to include new purchases of US soybeans, so the decision to postpone negotiations is viewed negatively for the major oilseed. Concurrently, soy oil contracts were negatively affected by declining crude prices, which reduced demand for the feedstock used in biofuel production.

Soy oil saw a decline of up to 1.7 percent, while leading soybean contracts saw a decline of up to 0.6 percent.

The announcement earlier in the day of a “celebration of agriculture” at the White House on March 27, which raised hopes of more clarity on US biofuels blending policy, would have prevented the decline, according to Joe Davis, director of brokerage Futures International.

He did, however, note that additional Beijing’s confirmation of the meeting will “probably be needed to meaningfully rekindle a broader ‘risk-on’ tone across the row-crop markets.”