(Bloomberg) -- Chicago soybeans prices rose slightly in a muted response to China’s decision to make a small cut in retaliatory tariffs on American imports along with other agricultural commodities.
Futures edged higher in the aftermath of Beijing’s announcement Thursday that it will halve additional tariffs on some $75 billion of imports later this month. With the earlier retaliatory duty remaining in place, it still means U.S. soybeans will be subject to a 27.5% tariff, down from 30% previously.
Chicago soybean prices have been whipsawed in recent weeks as optimism over an initial U.S.-China trade pact was dampened by worries China may not be able to fulfill agricultural purchase pledges. The spread of the coronavirus added to food demand fears.
China’s reduction, effective Feb. 14, will coincide with a cut by Washington to tariffs on some Chinese products. Both nations have said they will scale back duties on each other’s goods as part of the phase-one deal signed last month.
“We don’t see any impact from the tariff cut as the measures are in line with what the U.S. side is doing,” said Li Qiang, head of Shanghai JC Intelligence Co. Chinese buyers are still able to import U.S. soybeans as well as other farm goods because Beijing continues to offer tariff waivers, he said.
Futures for March delivery rose 0.3% to $8.82 1/4 a bushel as of 11:23 a.m. in London. They’ve climbed about 1.1% this week, heading for the first gain since early January.
Beijing will also reduce punitive tariffs on U.S. pork, chicken and beef imports to 30% from 35% and on crude oil to 2.5% from 5%. U.S. livestock futures are not yet open for trading.
Top soy exporter Brazil is grappling with a logjam as heavy rain hampers soybean harvests and vessel loading. Its farmers are in the midst of collecting a bumper soybean crop that’s kept prices more appealing than U.S. rivals. China was said to have booked about 10 cargoes this week from South America, helping ease concerns it would cancel purchases amid the virus outbreak.