Soybeans Surge on China Talks

Soybeans exploded nearly 5% on Thursday on the heels of a tweet by President Trump: “Just had a long and very good conversation with President Xi Jinping of China… with a heavy emphasis on Trade.”

While light on details, the President’s optimism spilled over into the soybean market that has been desperate for a resolution to the trade war with China. Prices rallied from a one-month low near $8.31 per bushel to over $8.88 on Friday morning, when rumors of a pending trade deal excited markets further.

Although those rumors appear to be unfounded, there is increasing hope that the U.S. will be able to sell soybeans to China soon without the threat of trade tariffs.

Meanwhile, soy prices in China collapsed, a sign that the Chinese were more confident that U.S. beans could reach them soon, alleviating the shortage faced by the world’s largest soybean consumer.

China previously bought almost one-third of all U.S. soybeans, but the Asian nation imposed tariffs on U.S. beans in response to President Trump’s tariffs against Chinese goods. For some farmers, selling soybeans to China again could make the difference between bankruptcy and hefty profits this season.

**Palladium Market Ignites

Palladium recently pushed to an all-time high over $1,100 per ounce. The metal, which historically has been far less valuable than gold, now fetches nearly the same price as gold, which traded Friday for $1,233 per ounce.

Palladium has been rising as automakers produce more gasoline-powered cars, which depend on palladium-heavy catalytic convertors to clean their exhaust. Additionally, threats of tension with Russia have kept the price elevated, as Russia mines nearly 40% of the world’s palladium.

**Gasoline Spills Lower

Gas prices are nearing the lowest level of the year, bringing relief at the pump. The market is running on fumes as global oil production continues at a healthy clip, despite looming sanctions against Iran, a major oil producer.

Other OPEC nations, especially Saudi Arabia, are increasing production to replace the lost Iranian oil. Meanwhile, U.S. production has been setting new records, with American drillers producing a record 11.3 million barrels in August.

Plentiful oil and hyperactive U.S. refineries have led to an overproduction of gasoline, swelling U.S. stockpiles to a record 226 million barrels, enough gasoline to fuel Americans’ cars for almost a month.

As of midday Friday, December gasoline futures traded for $1.71 per gallon, a wholesale price that excludes taxes, transportation, and other expenses that raise prices at the pump.