Soybean Futures Tumble as China Excludes Crop From Tariff Relief Deal

Soybean futures on the Chicago Board of Trade (CBOT) dropped sharply on Monday after a new tariff reduction agreement between the United States and China excluded the key agricultural commodity. The omission is a significant setback for U.S. farmers, as China is the world's largest importer of soybeans.

Details of the Trade Agreement

Following a recent summit between the leaders of both nations, the U.S. and China agreed to mutually lower tariffs on $60 billion worth of each other's imported goods. A joint list of products eligible for tariff relief was released by the White House and China's Ministry of Commerce.

The list included several U.S. agricultural products, such as soybean oil and soybean meal. However, raw soybeans, the largest U.S. agricultural export to China, were not included. This means U.S. soybean shipments will continue to face an additional 10% tariff, a rate that traders say is untenable for private Chinese importers.

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Market Reaction

The market reacted swiftly to the news. CBOT November soybean futures (SX26) closed down 30-3/4 cents at $12.88-1/4 per bushel.

During the trading session, the most-active contract (Sv1) hit an intraday low of $12.70-1/4 per bushel, its lowest level since August 31, 2024. While Chinese state-owned buyers have increased some purchases, the persistence of the tariff is expected to continue weighing on broader demand.