(Bloomberg) -- After six consecutive days of weather-driven price gains, the rally in soybean futures in Chicago almost came to a halt Tuesday. One explanation may be the tariffs on imported solar panels and washing machines announced by President Donald Trump a day earlier.
China is the biggest maker of solar panels and expressed displeasure at the move. The country is also the largest buyer of U.S. soybeans, at a time when growing production and inventories have weighed on prices and intensified the battle between the U.S. and South America for market share. Could the crop get sucked into a China-U.S. trade dispute?
“My concern is there could be a spillover-effect on the soybean price" and China’s "willingness to buy our product,” Darin Fessler, a Lincoln, Nebraska.-based senior hedging adviser at Lakefront Futures & Options, said in a telephone interview Tuesday.
Trade isn’t the only bearish factor in the soybean market right now. U.S. exports are slower compared with a year ago and improving weather may ease crop concerns in Brazil and Argentina.
On Tuesday, soybeans for March delivery rose 0.2 percent to close at $9.8625 a bushel in Chicago. It was the contract’s seventh straight gain and the longest rally since July 11 amid dry weather in Argentina, the world’s largest exporter of soybean meal. Prices earlier fell as much as 0.5 percent.
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