Trump's China salvo sends oilseed stocks soaring

[Close up of a rape blossom]
Janina Steinmetz/DigitalVision via Getty Images

Oilseed and related agriculture stocks are climbing Wednesday following President Trump’s threat to sever business ties with China and increase U.S. cooking oil production.

In a Truth Social post on Tuesday, Trump accused Beijing of “purposefully not buying our Soybeans, and causing difficulty for our Soybean farmers,” a situation he called an “Economically Hostile Act.”

As a result, Trump said the U.S. could “easily produce Cooking Oil ourselves” rather than import it from China.

The saber-rattling reverberated through the sector, launching shares of Australian Oilseeds Holdings (NASDAQ:COOT [https://seekingalpha.com/symbol/COOT]) up more than 260%, Sadot Group (NASDAQ:SDOT [https://seekingalpha.com/symbol/SDOT]) by 90%, Origin Agritech Limited (NASDAQ:SEED [https://seekingalpha.com/symbol/SEED]) by 42%, and Bunge Global (BG [https://seekingalpha.com/symbol/BG]) by 15%. Other names posting outsized gains on Wednesday include Local Bounti Corp (NYSE:LOCL [https://seekingalpha.com/symbol/LOCL]), AgriFORCE Growing Systems (AGRI [https://seekingalpha.com/symbol/AGRI]), and Archer Daniels Midland (NYSE:ADM [https://seekingalpha.com/symbol/ADM]).

The rally may be fleeting, however, as Trump’s latest threat to Beijing seems designed to strengthen his hand ahead of talks with President Xi Jinping.

The trade spat between the U.S. and China escalated this spring when Beijing stopped buying American soybeans in an effort to gain leverage with the U.S. in response to trade tariffs against Beijing. The country shifted its imports to Argentina and Brazil, cutting off nearly a quarter of U.S. farmers’ business.

Related shares quickly lost ground and have been circling the drain at multi-year lows since.

MORE ON AUSTRALIAN OILSEEDS HOLDINGS LIMITED, LOCAL BOUNTI, ETC.

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* Sadot Group announces 1-for-10 reverse stock split [https://seekingalpha.com/news/4494103-sadot-group-announces-1-for-10-reverse-stock-split]