Lack of China Demand Hammers US Soybean Oil Prices
Argentina Moves to Temporarily Scrap Export Tariffs on the Country’s Crop Cargoes, Adding Pressure
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Soybean oil futures fell to the lowest in more than three months as top shipper Argentina moved to temporarily scrap export tariffs on the country’s crop cargoes, adding pressure to U.S. soy prices already weighed down by a lack of demand from China.
Argentinian President Javier Milei made the bid to bring dollars into the country to shore up a market sell-off before a crucial midterm election. The move heaped even more pressure on U.S. farmers already harvesting a soy crop with ongoing risks to demand.
“Argentina’s export tax holiday may chew into that demand somewhat in the weeks ahead,” StoneX chief commodities economist Arlan Suderman said in a note.
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With China out of the U.S. market, some traders are betting that soybean prices will need to go lower to entice other buyers. Fewer beans for export also could lead to more domestic U.S. processing, putting pressure on soybean oil prices as supplies increase.
Soybean oil was down as much as 2.5% Sept. 22, reaching the lowest since June 13. Meanwhile, soybeans were down as much as 1.9%, hitting the lowest in more than a month.
Shares of Archer-Daniels-Midland Co., which makes biofuel, fell as much as 5.2%. Shares at competitor Bunge Global SA were down as much as 4%. ADM ranks No. 80 on the Transport Topics Top 100 list of the largest private carriers and No. 11 among agriculture and food processing carriers.
Declines in the soy complex contributed to across-the-board losses in U.S. crop markets as traders continue to digest the Sept. 19 call between President Donald Trump and his Chinese counterpart, Xi Jinping. Prices for Chicago wheat — another commodity buyers in China sometimes favor — fell to the lowest in more than a month.
Many had hoped the call would begin to ease trade tensions between the two nations, particularly on agriculture shipments. China has for months avoided purchasing U.S. soybeans while also curtailing purchases of other crops in the new season.
“Friday’s phone call between Trump and Xi provided very minimal updates,” Matt Campbell, a StoneX risk management consultant, said in a note. “The market realizes a trade deal is not imminent, and the soybean market needs an imminent deal in short order.”
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