Soybean prices rallied briefly this week as Chinese and U.S. officials attempted to resolve the ongoing trade war. Traders were initially excited, but ultimately decided that both sides aren’t making significant concessions, leaving beans trapped near $8.90 per bushel.
Normally, China buys nearly one-third of all U.S. soybeans, but tariffs could lead to a record bottleneck of nearly one billion bushels.
Worse yet, South American farmers are planting more soybeans next season on the hopes that they can continue selling to China at a rapid pace.
This means that U.S. soybean prices could stay under pressure long term, even if tariffs with China are removed.