Trump said soybean prices have gone up. They're near decade-lows.

AP Photo/Andrew Harnik

President Donald Trump holds up hats that read "Make Our Farmers Great Again!" as he walks across the South Lawn before boarding Marine One at the White House in Washington, Thursday, Aug. 30, 2018, for a short trip to Andrews Air Force Base, Md., and then on to Evansville, Ind., for a rally.

• President Donald Trump said soybean prices have gone up.
• They have fallen to near decade lows since his trade war with China began.
• China has turned to South American countries to replace US soybeans.
• Soybean stocks are approaching record levels.

President Donald Trump claims US soybeans have largely held up against his trade war with China. But tariffs have pushed prices to lows not seen since 2008.

"And soybeans are going up, and things are going up," he said at a press conference in New York on Wednesday. "And we've had very little hurt, from what I've done. In fact, the markets have gone up, and the farmers are going to do great."

In reality, soybean prices have fallen more than 12% since China placed import tariffs on the legume to retaliate against the Trump administration. That country is the largest-soybean customer in the world, accounting for more than half of global imports in 2017.

"There's a lot of concern about the future," Gary Schnitkey, a farm management specialist and University of Illinois professor, said. "Because [soybean farmers] are going to see much lower prices as a result of tariffs."

Also on Wednesday, Trump said China has started buying US soybeans again. But officials in Beijing have been strategizing to minimize reliance on US soybeans since the start of the trade war. China has effectively swapped much of its demand to South America and away from the US, which is now seeing record levels of soybean stocks.

"At this juncture of deepening trade tensions, it is unlikely that private traders in China would seek to buy US origin soybeans," JPMorgan analysts said in a recent research note.

Deutsche Bank

In July, the Trump administration unveiled $12 billion in emergency aid to farmers who risked suffering financial losses from its trade policies. Soybean farmers are poised to get a large portion of the aid from the controversial plan.

"The soybean is not just some small thing in the background," Torsten Sløk, chief international economist at Deutsche Bank, said.

"It's actually something that is pretty important overall for what the agricultural sector is doing and in terms of where revenue is coming from. That's why we're watching very carefully whether soybean prices go up or down."

With no clear end ito the trade war in sight, analysts say there's little chance of soybean prices recovering anytime soon. Beijing cancelled high-level trade talks planned for this week after another round of Trump's tariffs on Chinese imports took effect. And the longer tariffs are in place, the more difficult regaining market share could be.

"Even under a best-case scenario, ie, cease of the trade war, it will be difficult to fully recover the prior extent of China's soybean import demand in our view," JPMorgan wrote.

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