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.”