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rickgthf
Senior Advisor

Soybeans, maybe, some patience is required. But more to the point....

While the price of soybeans has come up a bit, it's a little surprising how little given the actual situation.

  The chart below show the production alongside Sept. Ending Stock for the past few years.  You have to compare the ending stocks to the previous year's production to appreciate what it can be telling us.  Some years, a modest increase in production leads to a modest increase in ending stocks but not always.  It probably depends on Brazilian production.

   It took two years of 4.3-4.4 billion bu. production to bump ending stocks by 200 million bu (2016-2017) but it only took one full year of trade war to bump ending stocks up another 500 million bu. (14 MMT).

  That in mind, production dropped by 1000 million bu. this year, wiping out that 913 million ending stock in one stroke.

  Sooner or late, unless there are precipitous declines in usage, somebody will have to pay more for beans.

  But more to the point, if a trade deal does get signed, we won't have to worry about any 95 million acres of corn next year because we will be able to go back to planting 85-88 million acres of soybeans.

   Maybe that's something to be happy about this Christmas.

soybean prod & stks2-page-001.jpg
14 Replies
sol1971
Frequent Contributor

Re: Soybeans, maybe, some patience is required. But more to the point....

It's sad to say but the U.S. will not get back its market share of agricultural products... as of today China has already purchased more than half of the upcoming soybean production... that's not counting what they purchased from Argentine... it's hard to figure what the actual number that china will purchase during this marketing year...unless some weather abnormality happens during next growing season... however, i hope you are right and prices go up... if the trans pacific pact would have been done... it would have put pressure in china to follow the rules of the agreement in order to trade with every country that was involved, ...check out the investments that china has made in Africa, Australia and South America in the past 20 years...it's obvious that both economies need each other....but china's goal is to become the number one economy in the world....independent of the US... well i hope I'm wrong but until i see china purchasing more agricultural products, I cant say that this deal is good.

''

sol1971
Frequent Contributor

Re: Soybeans, maybe, some patience is required. But more to the point....

btw, more than half of brazil's crop

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freedom1493
Veteran Advisor

Re: Soybeans, maybe, some patience is required. But more to the point....

This is rather interesting....thoughts?

 

"Farmers "Deeply Worried" As Argentina's Fernandez Aims To Hike Export Taxes Twice In Three Days"

 

https://www.zerohedge.com/geopolitical/farmers-deeply-worried-argentinas-fernandez-aims-hike-export-...

sw363535
Honored Advisor

Re: Soybeans, maybe, some patience is required. But more to the point....

Those dead pigs are eating pretty well

rickgthf
Senior Advisor

RE: I agreee but...

I agree with your concerns about all the things you mention, how good the deal really is, how much the Chinese buy this year, the long term damage to our share of the market.   But we can be a little bit more hopeful today than a week ago, and if we can at least stabilize the bleeding and keep the patient alive that's something.

r3020
Senior Advisor

Re: RE: I agreee but...

China is buying pork. They need pork worse than bean meal.

k-289
Senior Advisor

Re: RE: I agreee but...

Liken  to  the  US  consumer  needing,  exempted,   Chinese - Tariff  Free -  Christmas  shopping  items  - - -    

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sw363535
Honored Advisor

Re: RE: I agreee but...

I agree with you on the beans on hand and the drop in production the weather caused...  We lost over a month of growing season heat.  That shows itself in the bean crop.  Nationwide we were most likely 15-20% below yield expectations.  Prevent plant and floods took out above that.

Highly likely we will have carry far below that projection chart.  Maybe be out of beans by july.  That chart makes some foolish assumptions.  Kansas took beans and corn acres down with half the state loosing opportunity to plant.

But my thoughts,,, will we see a normal market in an election year?  When so much is invested in destruction?

Looks like the big money will loose the vote.... or deserve to.  Will they also loose in the commodity markets where they have more control and more invested?  

Will we be clean and sober enough to vote by November?  Sobering and drying out is an ugly process.

 

 

rickgthf
Senior Advisor

Re: RE: And where does that pork come from?

I really don't care if the Chinese buy beans or pork because pork is just beans in different form.  Dollarwise it's more efficient to ship beans in the form of pork and we get to keep the nutrients from the manure.

  But you can see that Chinese soybean imports dropped about 10-12 MMT the past two years which was the better part of what they didn't get from us.  Now, maybe the Chinese didn't produce nearly as much pork but they use those soybeans for something, poultry, I'd guess.

  While it's likely we've some market share, hopefully as trade resumes and tensions ease we'll get most that back.  At a lower price probably but market share none the less.

 

Chinese soybean imports-page-001 (1).jpg
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