US Gulf soy prices hit 4-1/2-year lows after China raises tariffs

By Karl Plume

CHICAGO, April 4 (Reuters) - Cash soybean prices at U.S. Gulf Coast export terminals plunged to their lowest since September 2020 on Friday after China slapped steep tariffs on imports from the United States in response to retaliatory duties ordered by U.S. President Donald Trump.

The top soy importer announced it will impose additional tariffs of 34% on all U.S. goods from April 10, heaping further pain on the U.S. agriculture sector that is grappling with low prices and intense export market competition from Brazil.

The move came ahead of likely countermeasures expected next week from the European Union, home to major U.S. soy buyers Spain and Germany, and other importers of U.S. goods in the coming days.

Cash premiums for barges of soybeans loaded this month SYB-USNOLAC-C1 dropped by 6 cents a bushel on Friday as exporters anticipated a further drop in demand from already seasonally low levels.

"I don't think anyone wants to be sticking their necks out too much. It's not the prettiest picture right now for soybeans," said one grain barge trader.

Friday's basis drop, along with a 3.4% dive in benchmark Chicago Board of Trade futures Sv1, dragged prices for spot soybean barges at the country's largest export hub to around $10.41 a bushel, the lowest since September 2020, according to LSEG data.

Export demand for U.S. soybeans has been on the decline over recent weeks as global importers are increasingly sourcing supplies from Brazil, which is harvesting its largest ever crop.

China's retaliation against U.S. tariffs is likely to accelerate Beijing's move towards alternative suppliers like Brazil, a shift that began with a trade war during Trump's first term.

Chinese purchases of the latest U.S. soybean harvest are at their lowest level in five years, according to U.S. Department of Agriculture data.