logo
Soybeans hit 9-month high on biofuel tax credit proposal, trade optimism

Soybeans hit 9-month high on biofuel tax credit proposal, trade optimism

BEIJING: Chicago soybean futures rose to a nine-month high on Wednesday, supported by a proposal to extend the biofuel tax credit - boosting demand for US soybeans - and renewed optimism from a temporary truce in the US-China trade dispute.
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.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

US stocks mixed as markets eye earnings, trade talks
US stocks mixed as markets eye earnings, trade talks

Business Recorder

timean hour ago

  • Business Recorder

US stocks mixed as markets eye earnings, trade talks

NEW YORK: The Dow fell while the Nasdaq edged higher early Thursday as markets digested mixed corporate earnings and anticipated additional trade deal announcements from President Donald Trump. Google parent Alphabet was among the early gainers, rising about three percent after reporting a whopping $28.2 billion in second-quarter profits as it touted its artificial intelligence offerings. But Tesla dove around eight percent as CEO Elon Musk warned of a rough patch for earnings, while both Chipotle Mexican Grill and Dow Chemical suffered double-digit declines. About 20 minutes into trading, the Dow Jones Industrial Average was down 0.5 percent at 44,779.70. Wall St extends gains after report of US-EU nearing trade deal The broad-based S&P 500 gained 0.2 percent to 6,371.86, while the tech-rich Nasdaq Composite Index climbed 0.3 percent to 21,081.49. analyst Patrick O'Hare said Trump's trade announcement with Japan had raised hopes about further deals. 'There is underlying enthusiasm for more trade deals being struck before the August 1 deadline,' O'Hare said. The European Central Bank, meanwhile, held interest rates steady as policymakers waited to see whether the eurozone would strike a deal with Trump.

ECB holds rates with US tariffs decision on horizon
ECB holds rates with US tariffs decision on horizon

Business Recorder

time3 hours ago

  • Business Recorder

ECB holds rates with US tariffs decision on horizon

FRANKFURT: The European Central Bank held interest rates steady Thursday as policymakers waited to see whether the eurozone would be hit by higher US tariffs threatened by President Donald Trump. The pause brought to an end a streak of consecutive cuts stretching back to September 2024 that has seen the ECB slash its benchmark deposit rate to two percent. The swift reduction in borrowing costs for businesses and households in the 20 members of the single-currency bloc has come as inflation has fallen back from the double-digit peaks seen at the end of 2022. Consumer prices in the eurozone rose at a pace of two percent in June, exactly in line with the ECB's target for inflation. The sinking price pressures have opened the way for the ECB to lower interest rates, while concerns over the outlook for the eurozone have mounted. In its rates announcement the ECB said that the economic environment remained 'exceptionally uncertain, especially because of trade disputes'. Trump has set a deadline of August 1 to impose a basic tariff rate of 30 percent on goods from the EU, but negotiations to find a compromise deal have progressed. A spokesman for the European Commission said earlier on Thursday a deal with the United States is 'within reach', while diplomats said Wednesday the US had tabled a deal for a general 15-percent tariff. ECB to keep rates steady as trade conflict clouds economic outlook While waiting for a resolution to the trade dispute – or an unsuccessful end to talks – the ECB would want 'more clarity' before making their next move, UniCredit analysts said. Trade talks 'Neither the economic data nor latest data regarding price dynamics demand an immediate response from the ECB,' according to Dirk Schumacher, chief economist at German public lender KfW. Eurozone inflation came in at exactly two percent in June and economic indicators including rising factory output have encouraged more optimism about the health of the economy. The ECB would also want to 'keep some powder dry for the case of emergency' if Trump were to apply harsh tariffs, Berenberg analyst Felix Schmidt said. 'A further escalation in the trade dispute would have a significant negative impact on the eurozone economy,' leading to more rate cuts, Schmidt said. The increased strength of the euro against the dollar as a result of tariff uncertainty could also encourage policymakers to further soften the ECB's monetary policy stance. The euro has surged almost 14 percent against the dollar since the start of the year, boosted by investor moves to dump US assets in the face of Trump's impetuous policymaking and attacks on the US Federal Reserve. Strong euro A stronger euro would make imports cheaper and further suppress inflation. The ECB is already predicting the indicator to dip to 1.6 percent in 2026 before returning to target in 2027. Investors will be listening closely to ECB President Christine Lagarde's comments in Frankfurt at 2:45 pm (1245 GMT) for indications of what could come next. Lagarde dropped a strong hint that the ECB's cutting cycle was 'getting to the end' at the last meeting in June, while stressing a data-dependent and meeting-by-meeting approach in the face of uncertainty. After Thursday's pause, observers will turn their attention to how ECB thinking is developing ahead of its next gathering in September. 'A relatively quiet July meeting could feature some heightened scrutiny on how comfortable policymakers would be with another euro rally,' according to ING bank analyst Carsten Brzeski. Worries over currency fluctuations 'may not make their way to official communication, but could help tilt the balance to a more dovish overall tone,' Brzeski said.

Xi says China, EU must deepen trust but bloc chief urges ‘real solutions'
Xi says China, EU must deepen trust but bloc chief urges ‘real solutions'

Business Recorder

time3 hours ago

  • Business Recorder

Xi says China, EU must deepen trust but bloc chief urges ‘real solutions'

BEIJING: Chinese President Xi Jinping said China and the EU must deepen trust in a turbulent world but the bloc's chiefs called for 'real solutions' to move past an inflection point as they met in Beijing on Thursday. China's leadership has sought to draw the European Union closer as it positions itself as a more reliable partner than the United States and a bedrock of stability in a troubled world. But the EU has made clear there are deep divisions over trade, fears that cheap, subsidised Chinese goods could overwhelm European markets, and Beijing's tacit support for Russia's war against Ukraine. Though nominally intended to celebrate 50 years of diplomatic ties, the long list of grievances set the stage for a contentious summit. Welcoming EU Commission head Ursula von der Leyen and European Council chief Antonio Costa at Beijing's ornate Great Hall of the People, Xi said 'the more severe and complex the international situation is, the more important it is for China and the EU to strengthen communication, increase mutual trust and deepen cooperation'. In the context of that turmoil, Xi said, Chinese and European leaders must 'make correct strategic choices'. 'The challenges facing Europe at present do not come from China,' he added. 'There are no fundamental conflicts of interest or geopolitical contradictions between China and the EU,' the Chinese leader said. EU's von der Leyen hopes to 'advance and rebalance' China ties at summit In response, von der Leyen said 'it is vital for China and Europe to acknowledge our respective concerns and come forward with real solutions'. Ties had reached an 'inflection point', she warned. Costa also stressed to the Chinese leader that the bloc wanted to see 'concrete progress on issues related to trade and the economy, and we both want our relationship to be… mutually beneficial'. In a separate meeting on Thursday, Chinese Premier Li Qiang told the two EU leaders that 'close cooperation' was a 'natural choice' for the two major economies. 'As long as both China and the EU earnestly uphold free trade, the international economy and trade will stay dynamic', he said. Brussels had acknowledged the talks between its top bosses and Chinese leaders would be tense. 'We know that we don't see eye to eye with China on many issues,' a senior EU official told AFP last week. 'But we believe that it is essential to have this kind of very direct and open and constructive conversation sitting at the table at the highest level.' 'Not naive' China and the EU also vowed to 'step up' efforts to address climate change. The warming planet has historically been an area of convergence between Brussels and Beijing, with both sides signalling a willingness to cooperate on combating climate change. Chinese and European leaders agreed on enhancing bilateral cooperation in areas such as the energy transition and committed to accelerating global renewable energy deployment, a joint statement said. Also on the agenda for the EU is the yawning trade deficit with China that stood at around $360 billion last year and which von der Leyen has described as 'unsustainable'. Beijing has dismissed those concerns, insisting that Brussels must 'rebalance its mentality', not its economic ties with China. Von der Leyen has called for 'important steps' such as increased market access for European firms in China and reducing Chinese export controls, such as those on strategically crucial rare earths. If EU concerns were not addressed, 'our industry and citizens will demand that we defend our interests', she said in Thursday's talks with Qiang. The EU has imposed hefty tariffs on electric vehicles imported from China, arguing that Beijing's subsidies unfairly undercut European competitors. China has rebuffed that claim and announced what were widely seen as retaliatory probes into imported European pork, brandy and dairy products. A second key source of friction is the war in Ukraine – Brussels says China's deepening political and economic relations with Russia since the 2022 invasion represent tacit support for Moscow that has helped its economy weather sweeping Western sanctions. Meeting Xi on Thursday, Costa urged China to 'use its influence' to help end Russia's 'war of aggression'. Last week, the bloc adopted a new package of sanctions on Russia – including on two Chinese banks, leading Beijing's commerce minister to issue 'solemn representations' to his EU counterpart. 'This is a core issue for Europe,' the senior EU official said. 'We're not naive. We're not asking China to cut relations, but to step up the customs and financial controls.'

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store