PARIS: Chicago soybean and wheat futures extended losses to more than 2% after China said it would impose additional tariffs of 34% on all U.S. goods in retaliation of a similar duty announced by President Donald Trump.
The additional tariffs would apply from April 10, China’s Finance Ministry said.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 2.15% by 1042 GMT at $9.88-1/4 a bushel. The market was heading for its biggest weekly drop since November last year.
“U.S. soybeans are exported heavily to China. It’s not the case for wheat but it’s following the downward price movement,” a European trader said.
Wheat also fell 2.15% to $5.24-1/4 a bushel, while corn shed 1.3% to $2.14-1/4 a bushel.
Trump on Wednesday announced a baseline 10% additional tariff on most imports into the U.S., with higher duties on dozens of trading partners, including China at 34% and the European Union at 20%.
Economists said Trump’s levies could prove relatively advantageous for Brazil, which is the world’s biggest soybean exporter and competes with the U.S. for soy sales to China.
Chicago soybean, wheat, corn retreat on tariff uncertainty
The plan sent U.S. equities and oil prices falling as investors feared a global recession, while grain traders saw scope for disruption to U.S. agricultural exports, particularly soybean shipments to China.
However, some traders were relieved that Mexico was excluded from Trump’s sweeping new tariffs, as it is the biggest export market for U.S. corn. They also took comfort that Trump did not set a higher baseline tariff level.
Commodity funds were net sellers of CBOT soybean and soyoil futures contracts on Thursday and net buyers of corn, wheat and soymeal futures, traders said.
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