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Veteran Advisor

Mike Marketeye, a question?

There are a few reasons why the price of soybean futures continues to slide in spite of the fact that if the Chinese intend to honor their commitments to Phase One, they got to buy a bunch of soybeans sooner or later, and sooner if they expect to get the job done.

  One obvious reason is the supposed bumper Brazil crop is putting pressure on prices.  Another was alluded to in the administration's comment about keeping quantities secret to prevent market dislocations.

   My question for you, Mike, would you be able to detect if the Chinese were buying soybean futures on the lowdown in order to establish the price before actually announcing purchases?   Who normally handles the China soybean trade?  Would anyone know if they started buying for the Chinese account?

9 Replies
Honored Advisor

Re: Mike Marketeye, a question?

Those are great questions.   Most U.S. farmers would love to know the answers.   

I'm wondering if the deal included cancellation penalties?   If this was not addressed, you can expect buying followed by cancellations lowering the price, then re-buying at the discounted price.   They have been playing that game for far too long.  Our leaders have been very slow learners.   

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Honored Advisor

Re: Mike Marketeye, a question?

The thing with the futures, that`s from Chicago price.  One would think China`s most economical route would be PNW.  But the last few days of down bean markets, the problem was no buyers in the futures and traders going short, I`m guessing.  

JMO but the trade deal should`ve contained a orderly monthly buying schedule for beans.  I think it would ultimately be beneficial to all to have them just flat out buy 80-100 million bushel each month.  Because, assuming they intend to stick to the deal, having months of no sales, then a big 400 million bushel sale in one slug.  Only makes farmers weld their bin doors and prices fluctuate so that only a few benefit on spikes and most being bottom third sellers.  

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Veteran Advisor

Re: Mike Marketeye, a question?

Leaves  me  asking  if  they  are  showing  ''  The  Grapes  Of  Wrath ''  at  any  of  the  winter,  get  away  conventions - ? 

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Veteran Advisor

Re: Mike Marketeye, a question?

rickgthf,

Great questions, I agree. I will put some feelers out, next week, about this. I should be able to get some market perspective on these questions. Whether President Xi will ever tell me the truth is another thing.

 

But, I will try to get some perspective for you.

 

Thanks,

 

Mike

 

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Veteran Advisor

Re: Mike Marketeye, a question?

Rickgthf,

 

By the way, here's this week's listing of who's buying U.S. soybeans. China is at the top.

 

Soybeans:  Net sales of 790,000 MT for 2019/2020 were up 23 percent from the previous week and 59 percent from the prior 4-week average.

Increases primarily for China (225,900 MT, including 70,000 MT switched from unknown destinations and decreases of 171,300 MT), Mexico (218,900 MT, including 47,500 MT switched from unknown destinations and decreases of 1,500 MT), Egypt (187,500 MT, including 65,000 MT switched from unknown destinations), Vietnam (87,800 MT, including 70,000 MT switched from unknown destinations), and Germany (69,400 MT), were offset by reductions for unknown destinations (256,900 MT).

For 2020/2021, net sales of 120,700 MT were for unknown destinations (120,000 MT) and Japan (700 MT). Exports of 1,053,100 MT were down 13 percent from the previous week and 3 percent from the prior 4-week average.

The destinations were primarily to China (447,700 MT), Bangladesh (165,200 MT), Mexico (91,700 MT), Vietnam (80,900 MT), and Germany (69,400 MT).

 

Mike

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Veteran Advisor

Re: Mike Marketeye, a question?

rickgthf,

 

Still working on the answer, just so you know. I haven't forgotten.

 

Mike

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Honored Advisor

Re: Mike Marketeye, a question?

https://community.agriculture.com/t5/Marketing/Floor-Talk-January-27-2020/td-p/748171

Check out the african guy running through the locust(grasshoppers) eating crops.   That is what it feels like trying to get decent marketing information in a country where information is so politically controlled....You just have to look hard for anything other than empty yak yak, from those who claim to be in the know, or want to sell their connections.

My first reaction to mikes first response was to search floor talk and see when that data was presented..... That lays too much blame on Mike, he doesn't control what his "guests" present as information and he doesn't need to be expected to "outresearch his guests" just to keep them on subject.---It is too bad that he needs to or that I wish he had better guests.

Yet the rest of us,( a lecture to self), tend to jump at the obvious nonsense regergitated from media politics or pseudo science boogymen, and yet we do not discuss what we study when we do research.    (I don't want to lay it out there to face the foolish personal attacks.  yes Exports have been one of the most missrepresented areas all year.  It is obvious the Chinese trade should be changed.... control of our own data being just a small part.... intillectual property is far more important than the volume of beans they buy.  Yet the babble from "experts" hyped the political spin on it with outright lies about exports.  Research how many weeks out of 52 in 2019 went without a China purchase of american commodities and compare that to the claims of farm media (or those quoted)   

Secondly... 2019 saw the bean market build new markets, expand existing markets to greater levels than in any previous year with some customers.  But Reuters and Al want to keep us focused on China.... and are willing to claim we are nothing without their business.  And the new growth in export partners has been ignored.  Mexico for one... and sales to europe...  

All spin all the time really hurts open discussion.  Since everybody that can google is an expert the respect for differing viewpoints is near gone.

Also my fear for Marketing is we will go through a similar contraction of expression as we did in the previous election year.  But as long as a segment of us or the rural/metro divide assumes the other side is ignorant ---(Believe me I heard it on national tv this morning, the dispensing of those who belong in the midwestern basket of D...........)   The loss becomes the advice of those with experience while we wait on the robots to take over.

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Veteran Advisor

Re: Mike Marketeye, a question?

rickgthf,

 

I just posted an answer for you in a new thread.

 

Here's the thread: https://community.agriculture.com/t5/Marketing/bd-p/marketing

 

Mike

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Honored Advisor

Re: Mike Marketeye, a question?

Sorry for the interruption I made in this thread, mike.  

I just wanted to point that soybean news is and always has been there.  We actually get it pretty quickly.

Yesterdays usda "presentation" is a good example..... The "projection" that SA bean harvest will be a record is not information since it hasn't happened yet, it is clearly spin.  But if the ports in Brazil stopped shipping because of a virus or lack of a buyer that would be information, unless it hadn't actually happened, then it is spin.

A clear distinction between spin and information is always necessary in a readers mental filter.  Way too ofter our sources intentionally mix the two.

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