Use Trump’s Tweet Rally To Sell Soybeans

November 2, 2018 04:17 PM

This week President Donald Trump sent soybean markets higher with a simple Tweet about having a phone conversation with Chinese President Xi Jinping. If you’ve got soybeans to move, analysts recommend taking a good look at prices in the coming days because, as of late, soybean rallies are hard to come by.

“From a timing perspective you have to ask yourself, is it a political ploy? But obviously President Trump is going to try to make something happen here because he knows that this is something that needs to see some headway because t's probably one of the main things he's catching flack on,” Matt Bennett of Bennett Consulting told Tyne Morgan on U.S. Farm Report. “Whether it really happened or not, I guess a producer shouldn't really concern themselves with it that much. They should just be thankful for the kind of reaction that we saw on Thursday.”

According to Bill Biedermann of Allendale, we’ve had two other soybean rallies in the 30-34 cent range so far this year, one in March and one in July. Both of those rallies collapsed, so Biederman says this is a good opportunity to sell. 

Trade talks with China will be the thing that moves the soybean market, he says. 

“Because right now, if you were to fully factor in the loss of demand, you're looking at 450 million bushels and it could go all the way up to 600 million bushels,” he explained, adding that the effects of those losses could mean a significant increase in soybean carryout.  

“If we could resolve this, even if they just say ‘hey, let's work on trade, and we'll worry about all the other it stuff later,’ that would solve a huge problem for agriculture,” Biederman said. 

According to Bennett, farmers in Illinois and parts of Iowa who saw minimal yield loss damage are now in a position to make some money. “Especially after that rally we saw Thursday.”

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Spell Check

Menlo Park, CA
11/5/2018 08:39 AM

  Rick, the government just announced last Thursday that September was the largest monthly trade deficit with China in history. Why don't you explain to everyone how the tariffs are working?

Jonesboro, AR
11/5/2018 08:30 AM

  Keith, I must admit I do not grow corn and know little about Rin waivers and such but I do know I am an American before I am a farmer and I am tired of the Chinese running roughshod over us. 16 years of two horrible presidents has crippled our trade with the world, especially China. Why should we let the communists steal our intellectual property and run an approximately 400 BILLION dollar trade surplus with us? My prediction, the Chinese will capitulate and America will be better off for it.

Jonesboro, AR
11/5/2018 11:00 AM

  Well Scott, though I'm no economist like you seem to be, I'll take a common sense guess. The trade deficit is so huge with the communists, Trump hasn't placed tariffs on a lot of the junk we get from them thus we are still buying it. I still see plenty of crap at Walmart "made in China". I'm assuming that if and when tariffs are placed on these critical items, they won't be there to buy thus lowering the trade deficit. On the other end, China has placed tariffs on their #1 import ag products. By doing this, the trade deficit also rises. As I said, common sense. Scott, I'm assuming by your comments that you are ok with the Chinese taking advantage of us in trade, although it could just be a severe case of TDS. One thing I do believe is that prior to Trump we had 16 years of two of the emptiest suits in presidential history back to back. The Communists knew it and took full advantage of it!