Brazil soybeans rebound, futures dip on fresh US tariff threat

Premiums for soybeans over futures rocketed again late Thursday after markets closed as US President Donald Trump ramped up the rhetoric and proposed $100-billion of additional tariffs on Chinese goods.

After ending Thursday offered at 155 cents over May futures and bid at 150 cents, May cargoes loading out of Paranagua surged back towards the 200-cent level in the overnight market as futures tumbled 15 cents.

According to two sources, paper premiums traded at 150 cents, 170 cents and 190 cents as May futures on the Chicago Board of Trade fell from $10.31/bu to $10.03/bu.

By 0130 Eastern Time, they were valued at $10.17/bu.

The price move erased much of Thursday’s retracement, which had seen premiums fall from 200 cents to 150 cents on growing confidence that Chinese proposals to tax US imports of soybeans would be avoided.

However, that confidence eroded after the markets closed on Thursday as President Trump said he had asked the US Trade Representative Office whether it would be appropriate to levy taxes on $100 billion worth of additional Chinese goods.

He said the tariffs were being considered "in light of China’s unfair retaliation".

Under intense pressure from farm lobbies, Trump also said late Thursday he had asked his secretary of agriculture "to implement a plan to protect our farmers and agricultural interests."

A spokesperson for China's Ministry of Commerce said Friday: "We do not want to fight, but we are not afraid to fight a trade war."

On Wednesday China proposed to levy a 25% tax on $50 billion worth of US imports, including soybeans, for what is says is retaliation for an earlier US plan to levy a 25% tax on a similar volume of Chinese imports.

China has not yet set a date for the implementation to tax US soybeans, which were worth $14 billion last year, and the US proposals for all tariffs remain published for consultation until at least next month.