China Trade War Rattles Investors In New U.S. Soy Processing Plants | 7/6/2018 | Staff
melanie7 (Posted by) Level 3
CHICAGO (Reuters) – The U.S.-China trade war is spooking potential investors in soybean crushing plants planned for Wisconsin and New York state, developers said, casting doubt on the future of a sector that had been a rare bright spot in the U.S. farm economy.

Crushers in the United States have been posting near-record profits by snapping up cheap and plentiful soybeans no longer purchased by China and making soymeal and soyoil for export to Europe and Southeast Asia.

Margins - United - States - China - Attempt

But margins are not predictable as the United States and China attempt to resolve their trade differences before a March 2 deadline, adding another puzzle as investors parse out the costs and impacts of a trade dispute between the world’s two largest economies.

WSBCP LLC, or the Wisconsin Soybean Crushing Plant, is struggling to find backers for the state’s first soy processing facility because of uncertainty in agricultural and financial markets over the trade conflict, said Phil Martini, chief executive of industrial contractor C.R. Meyer & Sons Co, who is overseeing the project.

Giant - People - Martini

“I’m not a mental giant, but it doesn’t take one to think people are uncertain about what’s going on,” Martini said.

“The crush margin is very good but it can go the other way.”

China - Percent - US - Soybean - Exports

China bought about 60 percent of U.S. raw soybean exports last year in deals worth $12 billion, but has mostly been buying beans from Brazil since imposing a 25 percent tariff on American soybeans in July in retaliation for U.S. tariffs on Chinese goods.

U.S. President Donald Trump and his Chinese Counterpart Xi Jinping agreed on Dec. 1 not to impose additional tariffs for 90 days, a truce that spurred Chinese purchases of a few million tonnes of U.S. soybeans this month.

Beijing - Soy - Tariff - Move - Deals

It is unclear when or if Beijing will remove its soy tariff, a move that would spur more deals and lift...
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