July 6, 2018 / 7:42 AM / 9 months ago

RPT-UPDATE 1-China soymeal futures plunge then recover amid confusion over import tariffs

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* Soymeal futures expected to rise on Friday after Beijing tariffs

* But market confused over lack of explicit tariff statement

* Soymeal recovers most of losses by market close

By Dominique Patton and Hallie Gu

BEIJING, July 6 (Reuters) - China’s soymeal futures fell more than 2 percent on Friday afternoon before recovering most of those losses, amid market confusion over whether China had implemented tariffs on soybeans and other goods from the United States.

The U.S. had said it would impose tariffs on $34 billion of Chinese imports from 12.01 pm in China (0401 GMT), and Beijing had promised to retaliate in kind.

That retaliation was set to include 25 percent duties on a range of U.S. products including soybeans, crushed in China to make soymeal for animal feed. The tariffs are expected to make soymeal more expensive, supporting soymeal futures, particularly in forward months when the United States is China’s primary soybean supplier.

But amid a lack of an official statement detailing the implementation of tariffs by Beijing, the market remained confused about China’s response.

The January soymeal contract traded on the Dalian Commodity Exchange had fallen to 3,097 yuan ($465.95) a tonne, by 0545 GMT, down 2.5 percent on the morning close, before later recovering from most of the losses.

“The market is quite lost. No one knows what is going on,” said Pan Tiantian, analyst with Zheshang Futures.

The most active soymeal contract also fell, before paring losses and edging up over the morning session’s close, while domestic soybeans remained lower.

The most active rapeseed contract traded on Zhengzhou was up 1.87 percent at the end of the session at 5,490 yuan per tonne. Rapeseed is an alternative protein to soybeans for animal feed

“There is just great volatility in the market,” said Pan. “The trade war has been on and off for so many times. No one is certain about it.”

$1 = 6.6466 Chinese yuan renminbi $1 = 6.6526 Chinese yuan renminbi Reporting by Dominique Patton and Hallie Gu; Editing by Sherry Jacob-Phillips and Joseph Radford

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