China’s soybean futures climbed nearly 5 percent in morning trade on Monday, on track for their biggest daily gain on record after cold weather in the country’s northeast raised concerns about damage to crops, Reuters reports.
The most actively traded soybean futures on the Dalian Commodity Exchange, for delivery in January, jumped 4.6 percent to 3,793 yuan ($553.02) per tonne by 0500 GMT.
Investors piled into domestic soybean futures, betting on tight supplies after early frost in parts of the northeast, which could damage yields and the quality of crops.
“There was news that low temperatures in the northeastern provinces including Heilongjiang and Inner Mongolia have hurt soybeans there. Then money went in on the news,” said Tian Hao, senior analyst with First Futures.
The average daily temperature in China’s northeast region fell to 8.7 degrees Celsius on Saturday, well below the normal level of 16.3 degrees Celsius, according to data on the agriculture weather dashboard on Thomson Reuters Eikon.
The jump also came after U.S. President Donald Trump warned on Friday he was ready to slap tariffs on virtually all Chinese imports into the United States, further dampening hopes of an end to a trade war between Beijing and Washington.
China’s domestic soybean market is being closely watched as the world’s top consumer of the oilseed may rely more heavily on its domestic crop than previously, after Beijing slapped 25 percent tariffs on American cargoes in early July.