The US soybean futures have been falling for the eight-time consecutive time this week as the coronavirus affected China's ability to hold its part of the China-US trade deal. China had promised to purchase more of the agricultural product but the epidemic may render it immaterialized.
Last Thursday, the Chicago Board of Trade announced that the soybean futures in the US had fallen by 0.1 percent with a price of 8.92 USD. It closed at 0.2m percent last Wednesday. Wheat futures were also down by 0.1 percent at 5.61 per half a bushel. It has closed by 1.3 percent lower than the previous session as well.
US corn futures, on the other hand, improved by 0.1 percent ending with a price of 3.84 USD at ¾ a bushel. It closed at 0.6 percent in the previous season. The commodity was revealed to have drawn some support from exporters.
Private exporters claimed that they have sold about 124,335 tons of US corn to Mexico. It was also announced that they would be delivered in the 2019-2020 marketing year. However, it was shown that CBOT has declined by 0.1 percent to 3.86 USD per bushel.
According to phase one of the trade deal signed by Beijing and Washington last January 15, 2020, China would increase its demand for US imports on agricultural products. However, in the wake of the coronavirus outbreak, the former may not hold its end of the bargain until the epidemic is dealt with.
According to an agribusiness economist at National Australia Bank Phin Ziebell, the epidemic has caused uncertainty making it tougher for investors to react with the information laid out about financial markets to date. He added that it is still unclear about how the epidemic would impact the global demand for agricultural products.
Chinese markets reportedly closed for the Lunar New Year, but the effects of the market close also affected overseas markets. Investors were said to have shown lesser confidence that even Malaysian palm oil futures fell about 10 percent last Tuesday.
Despite the adverse news on agricultural product futures, the Malaysian palm oil futures recovered by Wednesday and the soybean market was said to have been gaining some ground as well.
Allendale also noted that the markets are still waiting on signs of the epidemic and the ability of China to push through with its end of the bargain in the China-US trade deal. It was then discussed that China is the world's largest soybean importer.