Soybean Extends Highs to 8.860, China Takes Positions in Trade WarSoybeans and Wheat got rejections from highs amid technical movements. China is reportedly piling up soybeans and taking positions ahead of a long trade war.
Soybean prices are losing steam on Tuesday as investors are digesting news from China and its intentions to stockpile the already purchased US soybean.
Corn found support at the 4.100 area and stopped two days of correction. It is now trading positive around 4.200. Soybean prices are trading positive on Tuesday with the unit extending highs beyond the 8.800 level.
Wheat advanced earlier in the day until trading as high as 5.222, its highest level since February 6. However, it got a rejection at that level, and the unit is now trading negatively at 5.000 the bushel.
China takes positions for a prolonged trade war
The Asian country has decided to pile up to 7 million tonnes of soybeans previously bought from the United States rather than crush them for immediate sale according to a report published by Reuters.
China previously bought the Soybean tonnes in an earlier truce in the trade war the Asian country is maintaining against the United States. Remember that the American nation is the second largest supplier of soybeans to China.
Experts are taking that movement as a clear signal that China is preparing itself for a long term trade war and any possible outcome in the next months.
According to the Reuters report, a Singapore-based trader who was briefed on the matter confirmed the history. “Whatever volumes of beans that now come from the US go into storage, as they are preparing for a long-drawn trade war,” the trader said.
Soybeans reach fresh highs
Prices of soybeans jumped earlier on the day to trade at fresh highs around 8.860, its highest levels since April 16. However, news from China have hurt the market, and the price has started to decline.
Currently, CDFs on Soybeans are traded at 8.748, 0.68% positive on the day. After the rejection at the 8.860, the pair seems overbought, and some sideways trading is expected.
To the upside, if the pair can hold above 8.655, it will face resistance at the 8.860 level. Then, the 9.000 comes in play with the 9.200 as the most crucial frontier in the middle term.
To the downside, if the pair breaks below the 8.655, it will find supports at 8.620 and 8.300. Then, 8.040 and the critical 7.800.
5.200 rejects Wheat and sent it to 5.000
Wheat is trading negative on the day after the unit rallied to 5.222, its highest level since February 6. However, the unit got rejected at that level, and it is now trading back around the 5.000.
Currently, Wheat is trading at 5.025, posting a 2.27% decline so far on Tuesday. The unit is now facing supports at the mentioned 5.000, then the 200-day moving average at 4.845. Below there, 4.700 is the next critical level.