Soybeans hit 9-month high on biofuel tax credit proposal, trade optimism
Trade developments pushed the most-active CBOT soybean contract up $10.81 per bushel, marking a nearly 0.8% increase by 0442 GMT.
The contract touched its highest point since July 26, 2024, and extended gains for the fifth consecutive session.
US House lawmakers unveiled a proposal on Monday to extend the clean fuel tax credit (45Z) until December 31, 2031.
South Korea's NOFI tenders to buy up to 138,000 metric tons corn
Andrew Whitelaw, an agricultural consultant at Episode 3, said that this extension would provide certainty for biofuel production, boosting demand for US soybeans.
He said that the potential 'demand cliff' following the 2027 expiration of the tax credit could significantly pressure crush margins and lead to weaker soybean prices.
Additionally, optimism was fuelled after US President Donald Trump said in an interview on Tuesday that he could envision direct talks with Chinese President Xi Jinping to finalize a US-China trade deal, following a temporary tariff pause between the two countries in Switzerland.
Analysts, however, cautioned that uncertainty persists as the US marketing season draws near.
'In most crop categories, the new crop won't come in until the fall season. So there's still a great deal of uncertainty about what will happen when the 90-day pause wraps up in August,' said Even Rogers Pay, agriculture analyst, Trivium China.
Producers also warned that the tariff pause alone will not help US farmers revive soy sales in China without additional concessions.
Meanwhile, wheat futures dipped 0.1% to $5.17 per bushel, hovering near contract lows due to high US inventories, signalling a better-than-expected supply situation. The USDA projected both US and global wheat-ending stocks for the 2025-26 season above analysts' expectations.
Corn was flat at $4.43 per bushel. US farmers had planted 62% of the nation's corn crop by Sunday, higher than analysts' expectations and ahead of the five-year average for this time of year of 56%, the USDA report showed.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
21 minutes ago
- Business Recorder
Stocks rise, euro firms after US-EU trade agreement
SINGAPORE: Global stocks rose and the euro firmed on Monday after a tradeagreement between the United States and the EU lifted sentiment and provided some clarity in a week of key policy meetings by the Federal Reserve and the Bank of Japan. The U.S. struck a framework trade agreement with the European Union, imposing a 15% import tariff on most EU goods - half the threatened rate, a week after agreeing to a trade deal with Japan that lowered proposed tariffs on auto imports. Countries are scrambling to finalise trade deals ahead of an August 1 deadline set by U.S. President Donald Trump, with talks between the U.S. and China set for Monday in Stockholm amid expectations of another 90-day extension to the truce between the world's top two economies. 'A 15% tariff on European goods, forced purchases of U.S. energy and military equipment and zero tariff retaliation by Europe, that's not negotiation, that's the art of the deal,' said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. 'A big win for the U.S.' S&P 500 futures rose 0.4% and the Nasdaq futures gained 0.5% while the euro firmed across the board, rising against the dollar, sterling and yen. European futures surged nearly 1%. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.27%, just shy of the almost four-year high it touched last week. Japan's Nikkei fell 0.8% after hitting a one-year high last week. While the baseline 15% tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal, it is better than the threatened 30% rate. The U.S.-EU deal provides clarity to companies and averts a bigger trade war between the two allies that account for almost a third of global trade. 'A major tail-risk has now been defused,' said Marc Velan, head of investments at Lucerne Asset Management in Singapore. 'Markets are interpreting this as a sign of stability and predictability returning to trade policy,' he added. 'The China delay fits the same pattern: the administration is opting for controlled diplomacy over confrontation.' China's blue-chip stocks rose 0.3% while the Hong Kong's Hang Seng index (.HSI), opens new tab advanced 0.75%. The Australian dollar , often seen as a proxy for risk appetite, was at $0.657, hovering around the near eight-month peak scaled last week. FED, BOJ await In an action-packed week, investors will watch out for the monetary policy meetings from the Fed and the BOJ as well as the monthly U.S. employment report and earnings from megacap companies Apple, Microsoft and Amazon. While the Fed and the BOJ are expected to maintain rates, comments from the officials will be crucial for investors to gauge the interest rate path. The trade deal with Japan has opened the door for the BOJ to raise rates again this year. Meanwhile, the Fed is likely to be cautious on any rate cuts as officials seek more data to determine tariffs' impact on inflation before they ease rates further. But tensions between the White House and the central bank over monetary policy have increased, with Trump repeatedly lashing out at Fed Chair Jerome Powell for not cutting rates. Two of the Fed Board's Trump appointees have articulated reasons for supporting a rate cut this month. 'Inflation readings, particularly the PCE index, and the upcoming July jobs report will shape expectations beyond this meeting, with the next likely policy pivot now pushed out to September if inflation continues to ease,' said Kieran Williams, head of Asia FX at InTouch Capital Markets. In commodities, oil prices rose after the U.S.-EU trade agreement. Brent crude futures and U.S. West Texas Intermediate crude both rose 0.5%. Gold prices fell on Monday to their lowest in nearly two weeks on reduced appetite for safe havens.
Business Recorder
21 minutes ago
- Business Recorder
India's equity benchmarks set to open near one-month low
India's equity benchmarks are likely to open on Monday near the previous session's one-month closing low, with uncertainty over trade talks with the U.S. and weaker-than-expected results from Kotak Mahindra Bank weighing on sentiment. The Gift Nifty futures were trading at 24,841 points as of 8:04 a.m. IST, indicating that the Nifty 50 will open near Friday's close of 24,837. The benchmark hit its lowest level since June 20 at 24,806.35 points in the previous session. The Nifty 50 and 30-stock Sensex have logged four consecutive weekly losses due to weak earnings, foreign outflows and uncertainty over U.S.-India trade deal. Negotiations between India and the United States remained deadlocked over tariff cuts on agriculture and dairy products, dimming hopes of an interim deal ahead of U.S. President Donald Trump's August 1 deadline. Meanwhile, the U.S. struck a framework trade agreement with the European Union over the weekend, averting a bigger trade war between the two allies, which account for almost a third of global trade. The easing global trade tensions buoyed equities globally. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2%, just shy of the almost four-year high it touched last week. Kotak Mahindra Bank will be in focus on the day after India's No. 3 lender by market capitalisation reported a drop in first-quarter profit on Saturday, as it set aside more funds for potential bad loans and saw a contraction in lending margins.
Business Recorder
21 minutes ago
- Business Recorder
Euro rises after US, EU agree to tariff deal
TOKYO: The euro gained on Monday following the announcement of a framework trade agreement between the United States and the European Union, the latest in a flurry of deals to avert a global trade war. Meeting in Scotland on Sunday, U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the deal, which will result in a 15% tariff on EU goods, half what Trump had threatened to impose from August 1. Senior U.S. and Chinese negotiators are due to meet in Stockholm on Monday with an aim to extend a trade truce and prevent steep tariff hikes. Meanwhile, investor attention is shifting towards corporate earnings and central bank meetings in the U.S. and Japan. 'It could be a positive week, just purely from the fact that now we know the rules of the game, if you like,' said Rodrigo Catril, senior currency strategist at National Australia Bank. 'Now that there is more clarity, you would think that not only in the U.S., but around the globe, there will be a little bit more willingness to look at investment, to look at expansions, and to look at where the opportunities are,' he said on a NAB podcast. The euro stood at $1.1763 , up 0.2% so far in Asia. The common currency rose 0.2% to 173.78 yen . Trump said the EU plans to invest some $600 billion in the U.S. and dramatically increase its purchases of American energy and military equipment. The pact is similar to one forged with Tokyo negotiators last week that will see Japan investing some $550 billion in the U.S. and a 15% tariff imposed on its cars and other imports. The baseline 15% tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal. China is facing an August 12 deadline to reach a durable trade pact with the U.S. No breakthrough is expected in the U.S. and China talks in Stockholm, but analysts said another 90-day extension of a trade truce struck in mid-May was likely. The U.S. dollar advanced on Friday, bolstered by solid economic data that suggested the Federal Reserve could take its time in resuming interest rate cuts. Both the Fed and the Bank of Japan are expected to hold rates steady at this week's policy meetings, but traders are focusing on the subsequent comments to gauge the timing of the next moves. The dollar was little changed at 147.68 yen . The dollar index , which tracks the greenback against major peers, fell 0.1% to 97.534. Sterling traded at $1.34385 , down almost 0.1%. The Australian dollar fetched $0.6576 , up 0.2%, while New Zealand's kiwi dollar was flat at $0.6019.
