This week, the news got worse for the United States’ top agricultural export, with new rounds of tariffs and a bearish forecast from the U.S. Department of Agriculture.
China matched the first and second rounds of U.S. tariffs of $34 and $16 billion last week, respectively, prompting President Trump to up the ante to tax another $200 billion of Chinese imports. As the trade war escalates, it seems more likely that Chinese tariffs against U.S. soybeans will be around for the foreseeable future, sharply reducing demand from the Asian nation that buys one third of all U.S. soybeans.
Due to this diminished demand, the USDA released a fresh outlook for soybean supplies, suggesting that stockpiles could rise by over 50% by the end of next summer, projecting a carryout of 580 million bushels.
This looming glut of beans slashed prices to a new nine-year low on Friday morning under $8.12 per bushel.