Soybeans Decline After Trump Reiterates China Tariff Threat

(Bloomberg) -- Soybeans fell in Chicago after US President Donald Trump said he’s considering tariffs on China, stoking fresh worries of a trade war between the world’s biggest economies. Wheat and corn also declined.

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Futures for March delivery dropped as much as 1.1% on Wednesday. The retreat wiped out some of the previous session’s 3.2% advance that was propelled by optimism Trump would hold off on immediate levies on China.

However, Trump said later Tuesday that his threat to hit all Chinese goods with 10% tariffs was still on the table. Such a move could prompt retaliation from China, the world’s biggest soybean importer, and deal a blow to US farmers.

Chinese customs authorities suspended soybean shipments from units of some Brazilian exporters. In a statement Wednesday, Brazil’s agriculture ministry said Chinese customs oficials cited instances of sanitary non-compliance in some soybean cargoes.

“The timing of the move is curious, as it comes right as the flush of new-crop supplies start reaching the ports in Brazil,” Arlan Suderman, chief commodities economist at StoneX, wrote in a note to clients. “It’s possible that there were genuine phytosanitary issues, but I doubt it. More than likely China was looking for some leverage – either against these companies or against Brazil – or possibly simply wanting to manipulate the basis market.”

--With assistance from Keira Wright.

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