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Veteran Contributor

The simple truth of the matter is,.....

Analysts are saying, "we back to where we started  a few months ago with soybeans".

Somebody can't see the forest for the trees.  The simple truth of the matter is, if trump hadn't started this whole trade war with China, we won't have an extra 800 million bushel of soybean carryover and give the 77 million planted acres at 40-45 bushel per acre yield, soybeans would be north of $12 today.

  And nobody would be arguing that their MFP payment was less than their neighbor's in the next county either.

This whole thing is fiasco that was foreseen and predicted 18 months ago by many.

7 Replies
Honored Advisor

Re: The simple truth of the matter is,.....

I don`t know how you figure "soybeans would be $12 if  trump wasn`t president".  If that were true, then beans in Brazil at the Port of Paranagua would be "$12/bushel".  According to Bloomberg after the trade dispute the other day, Brazil`s premium jumped to 99 cents...well if CBOT beans are $8.57 and add a buck for Brazil, that`s $9.57/bushel US equivalent.  

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https://www.bloomberg.com/news/articles/2019-08-02/china-is-said-to-turn-to-brazil-for-soybeans-amid...

 

The prospect of China stepping up purchases has pushed up Brazilian prices. The premium for October at Paranagua port soared 11% Friday to 99c a bushel, data from Commodity 3 show.

 

Soybean premium jumps again after Trump's new tariffs

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Veteran Contributor

Re: For years the Brazilians priced their beans $20-30 per ton cheaper than the US just to...

For years the Brazilians charged $20-$30 per ton less than the US just to get the business or rather because the US had a strong domestic market to compete with the export market.

 Now Brazil can get $40 a ton more the difference is $60-70 the other way.  

  Every year Brazil gets that much more money means that many more acres of Brazil get's converted to soybeans and the loss of that much more market for the US to sell into.

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Honored Advisor

Re: For years the Brazilians priced their beans $20-30 per ton cheaper than the US just to...

Can China afford to pay $1 more per bushel of beans to a country that can`t afford to run $400 billion trade surpluses in the greater economy?    Answer: They think they can, until November 2020 anyways.   However, Warren, Sanders and many Democrats don`t actually disagree with Trump on trade.

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Contributor

Re: The simple truth of the matter is,.....

I have to agree with Rick. If the US soybean sales had stayed at previous levels and combine that with the spring we just had. Which side of the market do you think traders would be on? 12 dollar beans seem quite likely. 

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Frequent Contributor

Re: For years the Brazilians priced their beans $20-30 per ton cheaper than the US just to...

This could be one of the reasons why China is so upset with Trump --> Brazilian soybeans now have less protein than what China demands and Brazil's soybean sales to China are at risk because of it.

https://wsau.com/news/articles/2019/jul/19/exclusive-brazil-soybeans-lose-protein-china-sales-at-ris...

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Honored Advisor

Re: For years the Brazilians priced their beans $20-30 per ton cheaper than the US just to...

It`s a head scratcher, no country in the world has been nicer to China in the last 3 decades, yet they drag their feet on making a very easy deal...like I`ve said in the past, they could agree to cut their $400 billion trade surplus with the US in half, Trump would get his "win"  we`d sell $12 or maybe $13 beans.  Ag trade with them is so tiny compared to the bigger trade economy that they could buy US beans and dump them in the ocean if they can`t use them, just to keep their number One customer happy.  But no they`re being irrational to the point they could go back to 3rd world status in 1 year.  Parents may be telling their kids to clean their plates because "there`s starving kids in China" again.   Sooo damned bullheaded.

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Advisor

swohio,

I agree w you and Rick too. 

I guess I'm a firm believer that trade balances and supposed imbalance Always straighten themselves out anyway. 

Govt intervention to  what is basically a global currency market is a fictional ruse.  MO

I tend to feel beans are headed to 12 and 14 irregardless.  There's 2 much depending on a SA big crop this winter.   Just Ain't gonna happen MO. 

Furthermore I figure the USA will lose their 2020 crops due to drought next year. 

Mother Nature extremes Are the Norm times. 

Say beans in the $20s from 2020 on.   We'll See. 

 

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