EVANSVILLE, Ind., May 8 (UPI) -- Soybean prices are nearing their lowest level in more than a decade following a series of tweets from President Donald Trump that threatened to increase tariffs on hundreds of billions of dollars on Chinese imports if a trade deal is not reached by Friday.
The threats came Sunday evening, following months of trade negotiations between the two countries.
"There was some optimism that we could get a trade deal put together," said Al Kluis, the managing director of Kluis Commodity Advisors in Wayzata, Minn. "Then, all of a sudden, instead of a deal, it was a threat to add more tariffs. It was a bombshell, and prices sharply lowered."
They have not recovered much, and experts say they are unlikely to do so until a trade deal is reached.
Following the tweets, the price for May soybean futures dropped from about $8.30 per bushel Sunday to $8.18 Monday. They bounced up slightly by Wednesday, opening at $8.19, according to the Chicago Mercantile Exchange.
Those prices are nearing a decade low. Prices last dropped under $8 per bushel in December 2008. Since then, they have generally stayed about $9 per bushel, having topped out at more than $17 in 2012. A year ago, they were around $10.33 a bushel.
Futures fell sharply after China imposed a 25 percent retaliatory tariff on American beans in July. For farmers, that means beans were selling for 10 to 20 percent below the cost of production, Kluis said.
"Soybeans really need a deal with China to have much hope of increasing at all," said Jack Scoville, a market analyst for The PRICE Futures Group. in Chicago.
Without such a deal, prices may drop further this summer and fall as a new crop of beans nears harvest time. Conversely, a trade deal could bring prices back up to a profitable level, analysts say.
"You tell me what's going to happen at the end of the week and I'll give you a better answer," Scoville said.
A Chinese delegation led by Vice Premier Liu He is expected to follow through on plans to visit the United States this week despite the tariff threats.Daniel Uria contributed to this report.