May soybean futures were down the daily limit at midday Monday, after President Donald Trump threatened to delay a summit meeting with Chinese leader Xi Jinping due to Beijing’s lack of a response to a request for help opening the Strait of Hormuz to oil-tanker traffic.
Heavy losses were seen across the soy complex overnight following Trump’s remarks in an interview with the Financial Times. “It’s only appropriate that people who are the beneficiaries of the strait will help to make sure that nothing bad happens there,” Trump said.
May soybean futures were down the daily 70-cent price limit at $11.55 ¼, with July soybeans hitting the 70 cent circuit breaker shortly after as well. New-crop November soybeans were off 37 ¾ cents, while May soybean oil fell 350 points and May meal dropped $10.90. Grain futures were also under pressure, with May corn down 13 3/4 cents, while May SRW wheat slumped 16 cents and May HRW wheat lost 15 cents.
The summit has been eagerly awaited for affirmation of what the Trump administration has said is China’s commitment to buy 25 million metric tons of soybeans a year for the next three years following its recent purchases of 12 million MT following the Trump-Xi meeting in South Korea in October. Trump also said last month that China was considering purchases of an additional 8 million MT.
With U.S. soybeans trading at a premium to Brazil, where harvest is under way, the market is sensitive to any signs of rising tensions between Beijing and Washington. Also, soybean futures saw heavy fund buying in the weekly period ending March 10, according to the latest Commodity Futures Trading Commission Commitments of Traders report, leaving the complex prone to profit-taking pressure.
Trump’s remarks came amid reports that reflected relatively upbeat pre-summit talks between U.S. and Chinese economic officials Sunday and Monday in Paris.