After months of talks, rumors, and denials, it appears that the United States and China have finally reached a deal to deescalate the trade war.
In announcements this week, both sides say they are reaching the final stages of a deal that would remove U.S. tariffs on Chinese goods, while China will increase imports from the United States.
Commodities markets rallied on the news, especially carrying soybeans, cotton, and pork higher as all three markets are heavily dependent on Chinese demand. Stock index futures contracts also shot higher, with many making all-time highs.
However, by midday Friday, most markets had given up most of their explosive gains, perhaps a disappointing reminder of the adage “buy the rumor, sell the fact.”
January soybeans traded for $9.07 per bushel, while February hogs and March cotton were worth 69.7 and 66.7 cents per pound, respectively.