When Trade Policy Shocks Hit the Pit: Pricing, Volatility and Speculation in the 2025 Soybean Futures Market

ABSTRACT This paper explores responses to major trade policy shocks in the soybean futures market in 2025. Using an event‐study framework, we analyse short‐run movements in soybean futures prices, historical volatility, implied volatility and speculative positioning around three major policy shocks: the U.S. tariff announcement targeting China on February 1, the reciprocal tariff announcement on April 2, and Argentina's temporary suspension of soybean export taxes on September 22. Broader in scope, the April reciprocal tariff package was associated with the clearest and strongest response. Futures prices fell by about 6% within two trading days, while implied volatility rose sharply. Following the February announcement, implied volatility increased immediately and then receded, while downward repricing became evident only after China's retaliatory tariffs took effect, suggesting that uncertainty rose before the implications for U.S. export demand became clearer. Argentina's export‐tax suspension, by contrast, was followed by limited repricing, a later decline in implied volatility, and greater speculative positioning relative to commercial hedging needs. The cross‐event comparison suggests that the timing and composition of market adjustment vary with the scope, directness and subsequent evolution of each policy episode.