Soybean Reaction Disappointing Despite China’s Purchase

December 15, 2018 06:30 AM

Despite China’s recent soybean purchase of 1,130,000 metric tons, according to the latest USDA Soybeans Export Sales Report, beans still didn’t see any price action. Instead, the legume closed on Friday, Dec. 14, down 14 cents.

Going back a couple weeks to the first of December, soybeans gapped higher, which is usually a positive sign, technically speaking, says Jerry Gulke, president of the Gulke Group. Unfortunately, soybeans were not impressed by the new purchase and Gulke speculates the market was looking for a big buying of beans on China’s part—much bigger than a million metric tons. 

“Of course, there are some rumors out there that they may buy as many as five or six or seven or eight, or maybe even 10 million metric tons of beans … so 1 million metric tons … is kind of like spitting in the wind at first but it's a start,” says Gulke.

China also removed tariffs on cars, which shows they’re trying to “play nice” but the markets didn’t react.

The good news is on the corn side. China has shown interest in corn, DDGs and ethanol, which leave the door open to corn. Currently, the U.S. doesn’t sell much corn to China so that commodity hasn’t been drastically impacted by the recent rhetoric but opportunity to sell more is there and hope springs eternal.


Listen to Jerry Gulke’s full commentary in this week's Weekend Market Report as he shares some insights from his Chicago conference and watch for his "Technically Speaking" column next week.


Listen to past Weekend Market Reports with Jerry Gulke and read his Technically Speaking column by visiting

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Spell Check

Greesnburg, IN
12/15/2018 12:12 PM

  1 mmt = 36.7437 million bushels. This week felt like we bought the rally and sold the fact. Also expectations started too high with initial thoughts of 8mmt to 10mmt. However traders are not a patient group. As far as the Mitigation payment, market has rallied 16% from its lows after loosing 23% from May highs. I for one not looking for any other monies and sold majority of beans this week. Between what I sold back in the spring, my record yields, and govt payment, I'll take my money & call it a year. Now I can focus on next year, where the real challenge appears to be.

Montfort, WI
12/15/2018 04:06 PM

  It does kinda feel like they sold the fact. Let's remember its called a futures market for a reason. Most analysts agree we are a week or two from South America beans being available and I suspect they will buy as little as possible. Between Brazil and Argentina they are estimating a 6 billion bushel crop on the way. I think new lows are possible. Currently we have a $.50 premium in the Nov 19 contract vs the nearby. I think the $9.60-80 range is a good place to start on next year's sales. I know I will get pushback but last year the top was $10.60 and Europe, Argentina and Australia were in a drought and the US carryover was half as much as this year. So for us to get back to those levels will take a production hickup here at home. I know, these prices suck but the upside is limited in my opinion.

Pat Latz
Indianapolis, IN
12/16/2018 11:40 AM

  NO BIG DEAL when U con- sides all of the other factors in The Chinese mini reces-sion. Fyi, Pat


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