Soybean market has its eye on Trump’s dinner date with Xi

The soybean market is laser focused on Donald Trump’s dinner date. Agriculture traders are on edge as the US president prepares to meet Xi Jinping, his counterpart from China, on Saturday amid the Group of 20 meeting in Buenos Aires. The question of the hour: Will the leaders get closer to a trade deal, or at least move to a tariff truce?

As tit-for-tat tariffs ratcheted up between the countries, soybeans became the poster child of the trade war. China started shunning US supplies and Chicago futures tumbled as a result, beleaguering American farmers. In the final days heading into the G-20 meeting, Trump started to give the market some hope with positive comments about how close the nations are to striking an accord.

Traders are hanging on Trump’s every word (and Tweet), trying to parse out the future for soybean demand. As discussion moved from the possibility of more tariffs on China to deal optimism, the back and forth left some investors cross-eyed. A measure of implied volatility jumped to the highest since August and futures volume rose. Underscoring the apprehension, hedge funds got more bearish on the oilseed just days before prices posted the best weekly rally in five weeks.

“The sentiment has changed multiple times over the last two weeks,” said Matt Gallik, a market analyst for CHS Hedging. “We know something is coming — we just don’t know what.” as a warm friendship.

Another big unknown, however, may be Trump’s personal unpredictability and his penchant for injecting drama into his appearances on the world stage.