The prices of soy that were rising earlier on the Chicago Stock Exchange have now lost direction once again in light of news of new retaliation by China against the US announced this Wednesday morning (9). The Asian nation increased its tariffs on American products to 84% and promoted a new escalation in the trade war.
Thus, at around 8:50 am (Brasília time), soybean prices rose by 0.25 to 3.50 points in the first maturities, with May worth US$ 9.96 per bushel, while September was worth US$ 9.74 and fell 1.75 points. Corn futures also felt the impact of the financial market - which reacted with an intensification of losses among the main assets, including a drop of more than 6.5% in oil, already trading below US$ 60.00 per barrel - and began to work in the red.
“In the specific case of grains, there is a bit of technical adjustment of positions after a recent sharp drop in futures prices. Traders are also trying to position themselves while waiting for the traditional monthly report on global supply and demand, which the USDA is expected to release this Thursday,” says Cerealpar’s daily report. The expectation is for a neutral to slightly bullish USDA report. There is a possibility that American and global stocks will be lower than expected. Even so, traders tend to remain quite cautious. This is because the US trade war with the rest of the world shows no signs of letting up.”
Other agricultural assets and oil volatility
Still on the CBOT, the wheat market remained in positive territory, as did soybean meal, which still finds support in projections of a smaller crush in Argentina. On the other hand, losses in oil were heating up and approaching 2%, also largely driven by the sharp drop in oil prices.
At the same time, the dollar index was already pointing to a drop of 0.8%, reaching 101.917 points. The S&P 500 VIX, which measures market volatility, was registering an advance of almost 8% this Wednesday morning.
Geopolitical environment and global impacts
Markets are still operating in an environment of extreme insecurity and uncertainty. Not only practical actions – such as Donald Trump’s tariffs coming into effect today or Xi Jinping’s immediate response – weigh on the progress of operations, but also statements from all parties involved. China has already stated that it will continue to position itself in the face of US moves and that it will not give in. The US Treasury Secretary, following the retaliation, stated that “it is a loss for them (the Chinese)”.
Thus, the American and European stock markets extended their losses, after the already quite negative closing of the Asian markets today. In Brazil, the dollar opened the day extending its rise. It already hits R$ 6.06. The gain is more than 1% against the American currency.
“Today, the backdrop for markets is a strong regional divergence. While Asia is gaining momentum, driven by signs of stimulus in China, Europe continues to flounder. Political impasses and fears of a slowdown continue to weigh on the continent,” say analysts at Agrinvest Commodities.
Source: Carla Mendes | Notícias Agrícolas
