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 AgWeb.com/Gulke.