Soybean price at lowest level since 2016

The low price for soybeans is due to the expected large stocks and high yields. The South American harvest is estimated at 2019 million tons for 189,5, while this year it was 170 million tons. The USDA (the United States Department of Agriculture) reported on Monday, June 25, that the soy harvest is expected to be above average.

Rate war
Trade tensions between China and the United States (US) also continue. For example, the Chinese Ministry of Finance has announced that import tariffs on livestock feed (including soy) from surrounding Asian countries will be lifted. The Chinese investors believe that Beijing is serious about imposing tariffs on soy imports from the US.

Because China is now not purchasing soybeans from the US, supplies in the country are increasing even more. At least, that is the expectation. These factors are pushing soybean prices on Chicago's CBoT to their lowest levels since early 2016.

(Text continues below the chart)At the CBoT in Chicago, soybean prices fell below $320 per tonne. 

Corn is also subject to the effects of the trade war. China bought almost 25% of US corn last year (283 million tons). This year it is expected that at least 70 million tons less will be purchased due to the trade tariffs. The condition of the crops is also very good, so a good harvest is expected. The corn quotation on the Matif in Paris is therefore steadily declining. The quotation moves around €163 per tonne.

Wheat harvest started
The wheat quotation on the Matif also fell towards €26 per tonne during week 170. A small price recovery is now visible. The decline mainly followed the international wheat markets. That listing is under pressure due to the trade conflict between China and the US.

The winter wheat harvest is already progressing well in France. The.. is also in other parts of Europe harvest started. The fact that the forecast in Russia (72 million tons) is about 13 million tons smaller than last year may be a reason for the small price increase that was visible on Wednesday, June 27, at the Matif in Paris. The wheat harvest in Germany is also expected to increase considerably lower partly due to extreme drought.

Business Insider reports Wednesday, June 27, that American President Donald Trump has moderated his tone somewhat. Trump is no longer committed to a law in which he can take protectionist measures on his own. On the other hand, he will focus on increasing the powers of a government body that scrutinizes takeovers by foreign companies. That could mean some relief on the grain markets.