Potential reemergence of the tensions between the US and China over soybeans could be one of the first tangible impacts of the new Trump administration according to a new Rabobank report.

In Rabo's latest Commodities Snapshot report author Carlos Mera nominated the oilseed complex as the grain sector to watch.

"Soybeans were at the centre of trade tensions between the US and China during Trump 1.0 and while China has taken steps to reduce its reliance on US exports in the interim, the humble bean could well find itself the subject of renewed trade hostilities," Mr Mera said.

He said the application of tariffs in the US agricultural sector, particularly in regards to imports of products such as biodiesel, would be critical.

"If the Trump administration reduced the flow of imported biodiesel it would be supportive of soybean oil values," he said.

However, on the other side, should China impose retaliatory tariffs on US agricultural products in response to Mr Trump increasing duties on imports from China could impact on demand and create higher stocks within the US, which would drag prices down.

So far, the market is punting on the bullish news, with Mr Mera pointing to a 11.3 per cent week on week increase in soybean oil.

There were some other bullish fundamentals in the market, including the drought now hitting Argentina and southern Brazil, but the ramifications of the new US government is front and centre on the market's mind.

Of the widely produced Australian crops, this news has had the biggest positive on canola markets, which have kicked by as much as $30/t to around $820/t delivered east coast and $850/t on the west coast before easing off towards the end of the week.

Mr Mera noted movement in wheat was much more muted, with a 2pc week on week gain in US futures attributed primarily to fundamentals, including cold conditions in North America and Russia and lower European Union exports.