Futures tank as Trump says China faces new tariffs

Soybean futures nosedived almost 2% in a matter of minutes on Thursday, taking both wheat and corn down with it, after President Donald Trump said China would face a new round of tariffs starting next month.

Soybean futures for September delivery hit a near 10-week low of $8.47/bu, while corn hit a near 11-week low of $3.93/bu after Trump said that China had reneged on previous commitments to buy US agricultural goods.

The announcement came shortly after the president met his trade negotiators who had just returned to the US after two days of talks with Beijing.

“We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently China agreed to buy agricultural products from the US in large quantities, but did not do so,” Trump said.

He added that the trade talks would continue, but while they do so the US would put an additional 10% tariff on the remaining $300 billion of imported goods from China.

The futures market was quick to react, with sources saying that Brazilian soybean premiums spiked 10 c/bu immediately on the news to offset the collapse in the futures price.

The market is anticipating that soybean purchases by Chinese private and state buyers will now dry up.

The announcement is being framed by some commentators as an admission that the concessions from China President Trump had been touting had never actually materialised.