Market question

[hoosier.hz]

This is just me wanting to learn here...

China agreed to buy 12 million tons of (U.S.) soybeans this season, and additionally, agreed to buy 25 million tons annually for the next three years. And soybean futures on the Chicago board of trade were about 1% higher in early U.S. trading on Thursday.
In 2024 the US exported nearly 27 million metric tons of soybeans to China.
Lastly, other countries in Southeast Asia have agreed to purchase another 19 million tons of U.S. soybeans, but did not specify a timeframe.

My question is, based on exports and sales from years past, do the new deals that were aforementioned and recently agreed upon guarantee at least some increase in prices in the near future, even it is only marginal and slim?

 

[rrlund]

Were you watching US Farm Report the morning that I got a free coffee mug from John Phipps reading my letter on the air? I asked pretty much the same question, but it was about USMCA when the whole ag industry was giddy and doing back flips over the signing of that. I just asked how I was really going to be better off before I went out and celebrated and spent the money. He got a real good chuckle out of that and said he was wondering the same thing. He broke it all down and said there wasn't really anything in it to celebrate. He was having a good time with it and ended by telling me that regardless, it was always a good time to buy a new Chevy pickup. I don't know if GM paid him for the plug or not.

I got the white mug by the way.

 

[1948CaseVAI]

You are asking for a guarantee regarding market prices? Nice one!

 

[TomA in CA]

I think the markets are gone for good. China Canada and others have found other sources for their needs. It may take years to rebuild the markets if ever.

 

[hoosier.hz]

You are asking for a guarantee regarding market prices? Nice one!

Not exactly, no? Just because you cannot not quantify sustained market gains does not also mean that you cannot guarantee upward movement as a result of market influencing factors. Like I previously stated, there has been an increase already. As a matter of fact, soybeans were up almost 16 cents this morning at open.
Just asking for people who definitely have more grain marketing experience than I do about a somewhat likely projection, that is all.

 

[scootergmc]

Well, based off what Oliverkid posted in another thread re: Soybean prices, I think much of this is a lot to do about nothing. But I mostly know nothing of commodities other than what limited investing I do in those markets. Someday I'll educate myself.

 

[oliverkid]

Well, based off what Oliverkid posted in another thread re: Soybean prices, I think much of this is a lot to do about nothing. But I mostly know nothing of commodities other than what limited investing I do in those markets. Someday I'll educate myself.

To add to that. Last Thursday spot price was $9.97. As of this morning spot price was $10.70. That’s the highest fall delivery cash price we have seen in 2 years.

 

[scootergmc]

To add to that. Last Thursday spot price was $9.97. As of this morning spot price was $10.70. That’s the highest fall delivery cash price we have seen in 2 years.

And as of right now live, it's 10.88. What does that mean for you?

 

[scootergmc]

Looking at the price history, it looks like market stabilization over the past couple years following the high priced co vid years.

 

[grandpa Love]

Was this announcement from the same guy who ended the war between Israel and Gaza? Yep....100% trustworthy . I wouldn't bet on soybeans going to China until the ship unloads there and the check clears the bank.

 

[oliverkid]

And as of right now live, it's 10.88. What does that mean for you?

Just regional differences. There’s other elevators around here paying a little more or less depending on their contract and storage status. I know the Louis Dreyfus crush plant in Claypool is close to 11. But they don’t publish their cash bids on the website so I can’t get an exact number. That’s to far for me to haul with my trucks so I’ve never bothered to get an account set up with them.

 

[urbancase]

my 2 cents is the only thing that will run prices higher is south America has major weather problem's like some years back. i think this nnalert for tat has done lasting damage, i heard some months back that China invested 2 billion dollars in SA to improve infostructure in roads to help delivery of good to ports. i am being carful for the next few years, i wanted to explained a few years ago and by another farm, right now i glad i didn't if you pencil everything out it take a long time for payback on ground bringing 18K a acre.

 

[paul]

Food and feed prices always depend upon supply and demand.

The world has done a good job growing a lot of grain the last 18 months or so. There is a lot of supply.

Several countries are in a bit of a recession, depression, call it what you will, individuals and countries have a bit less to spend and will be more frugal with their food spending.

So…. Grain prices were going to fall. Big supply, slightly less demand.

Throw in politics now, and for a year things will be exadurated. This is like when workers go on strike to get a better deal. Management and the workers Union say all sorts of nasty things about each other, make all sorts of demands, threats. And then eventually there is a settlement and everyone goes back to where they were.

We are going through that threaten and demand phase. Both sides rattle swords to look good representing back to their people. It usually gets the worst right before things get settled and everything is fine again. Just like strikes. Same principles.

China has had a trade war with us since the late 60s, some of us never paid attention…. They buy grain from us when they have to, they avoid us when they can.

They spent a bundle developing South America to be their bread basket. Argentina is processed bean oil supplier, Brazil is set up to supply raw beans for the China processors. Both countries have very different infrastructure, to accommodate cheapest oil and cheapest raw beans. Guided by China investments in both countries.

China will always only come to us when they run out of beans from South America.

Any purchases of beans from us to China is a good sign. It helps.

We only use about 1/2 the beans we grow in this country. So soybean prices depend on exporting to other countries that want them. Currently we are raising less beef than we have in decades, so we also are using less soybean meal than normal.

Right now the world has a lot of beans, and most countries are buying a few less beans than normal.

Trade talks certainly have a short term effect on exports. Long term, the world will grow more or less grains, and consume more or less grains. It will balance out in the long term.

Supplies, consumption, and politics is all against record grain prices right now, this year. Next year is a new one, and all of the above will change. As always.

I recall getting a bean price starting with a $4.xx not that long ago, so getting around $10.00 now really doesn’t seem that aweful?

Paul

 

[rrlund]

Food and feed prices always depend upon supply and demand.

The world has done a good job growing a lot of grain the last 18 months or so. There is a lot of supply.

Several countries are in a bit of a recession, depression, call it what you will, individuals and countries have a bit less to spend and will be more frugal with their food spending.

So…. Grain prices were going to fall. Big supply, slightly less demand.

Throw in politics now, and for a year things will be exadurated. This is like when workers go on strike to get a better deal. Management and the workers Union say all sorts of nasty things about each other, make all sorts of demands, threats. And then eventually there is a settlement and everyone goes back to where they were.

We are going through that threaten and demand phase. Both sides rattle swords to look good representing back to their people. It usually gets the worst right before things get settled and everything is fine again. Just like strikes. Same principles.

China has had a trade war with us since the late 60s, some of us never paid attention…. They buy grain from us when they have to, they avoid us when they can.

They spent a bundle developing South America to be their bread basket. Argentina is processed bean oil supplier, Brazil is set up to supply raw beans for the China processors. Both countries have very different infrastructure, to accommodate cheapest oil and cheapest raw beans. Guided by China investments in both countries.

China will always only come to us when they run out of beans from South America.

Any purchases of beans from us to China is a good sign. It helps.

We only use about 1/2 the beans we grow in this country. So soybean prices depend on exporting to other countries that want them. Currently we are raising less beef than we have in decades, so we also are using less soybean meal than normal.

Right now the world has a lot of beans, and most countries are buying a few less beans than normal.

Trade talks certainly have a short term effect on exports. Long term, the world will grow more or less grains, and consume more or less grains. It will balance out in the long term.

Supplies, consumption, and politics is all against record grain prices right now, this year. Next year is a new one, and all of the above will change. As always.

I recall getting a bean price starting with a $4.xx not that long ago, so getting around $10.00 now really doesn’t seem that aweful?

Paul

Has China even bought all of the beans yet that they agreed to buy 6 years or so ago? I don't know how anybody can take either side seriously.There's no history of follow through. It's just "Problem solved. Next crisis.".

 

[DanielW]

Has China even bought all of the beans yet that they agreed to buy 6 years or so ago? I don't know how anybody can take either side seriously.There's no history of follow through. It's just "Problem solved. Next crisis.".

A few weeks ago I was talking to the production manager at a plant I used to work at. His wife is Argentenian and they own a house down there on the Eastern coast. He told me the same thing that you read about in the farming magazines/news: Ever since the first Trmp administration, China has invested colossal amounts in South-American agriculture, because (rightly or wrongly) they see the US as a little too volatile - they have no idea what the next administration might do. He says it's a completely different world than what you'd see down there 10 years ago. He was actually rather upset about it: 10+ years ago his area was (apparently) primarily quiet, small-scale, and rather antiquated agriculture. Now the farms around him are the size of creation and the equipment and operations in his region there match anything you'd see elsewhere. He says it's lost all of its quiet rural charm for him.

While China may have made some agreements in the short-term, I'm a little doubtful they're going to change their opinions about the volatility of the US administrations. They'll keep investing more and more in Africa and South America where they have complete control and influence. I'm certainly in no place to judge as I know nothing about the details, but the deal they've struck seems a little poor from the US perspective: China gets immediate relief on tariff pressure, and in exchange they agree to some long-term investment and purchasing that (as rrlund pointed out) no one's ever going to follow up on.

 

[grandpa Love]

Has China even bought all of the beans yet that they agreed to buy 6 years or so ago? I don't know how anybody can take either side seriously.There's no history of follow through. It's just "Problem solved. Next crisis.".

And the next " crisis" is always right around the corner .....one thing after another, it's causing fatigue in this country. Just a general worn out feeling

 

[oliverkid]

A few weeks ago I was talking to the production manager at a plant I used to work at. His wife is Argentenian and they own a house down there on the Eastern coast. He told me the same thing that you read about in the farming magazines/news: Ever since the first Trmp administration, China has invested colossal amounts in South-American agriculture, because (rightly or wrongly) they see the US as a little too volatile - they have no idea what the next administration might do. He says it's a completely different world than what you'd see down there 10 years ago. He was actually rather upset about it: 10+ years ago his area was (apparently) primarily quiet, small-scale, and rather antiquated agriculture. Now the farms around him are the size of creation and the equipment and operations in his region there match anything you'd see elsewhere. He says it's lost all of its quiet rural charm for him.

While China may have made some agreements in the short-term, I'm a little doubtful they're going to change their opinions about the volatility of the US administrations. They'll keep investing more and more in Africa and South America where they have complete control and influence. I'm certainly in no place to judge as I know nothing about the details, but the deal they've struck seems a little poor from the US perspective: China gets immediate relief on tariff pressure, and in exchange they agree to some long-term investment and purchasing that (as rrlund pointed out) no one's ever going to follow up on.

More like the last 20 years not the last 10. They have also been investing heavily in parts of Africa for years. China has always wanted to do as little buying from us as possible. It’s not as easy for them to buy their way into our system like it is in less developed countries.

 

[rrlund]

And the next " crisis" is always right around the corner .....one thing after another, it's causing fatigue in this country. Just a general worn out feeling

Yep. I used to be a news and information junkie. I finally reached the breaking point. I haven't seen any news, state, national or world, since February of 24. I can't do it, I just can't. I broke down. I can't stay keyed up anymore. I defy anybody to tell me how the world is any better or worse off because I don't know every crisis of the day or think that the world will collapse if I don't fix it myself in my own mind. You'll never be able to tune out the whole world and not know anything that's going on, but if I knew everything every day, I would have ended my life by now. I don't know about the rest of the world, but my world is better without my knowing. The rest of you have fun with this stuff.

 

[scootergmc]

And the next " crisis" is always right around the corner .....one thing after another, it's causing fatigue in this country. Just a general worn out feeling

Like rrlund, I've learned that if I turn off the TV and shy away from accompanying sites on the internet, the fatigue level drops immensely. So much of the origins of fatigue are manufactured, as are the reinforcements to stay connected to them. I encourage others to do the same.

 

[flying belgian]

Yep. I used to be a news and information junkie. I finally reached the breaking point. I haven't seen any news, state, national or world, since February of 24. I can't do it, I just can't. I broke down. I can't stay keyed up anymore. I defy anybody to tell me how the world is any better or worse off because I don't know every crisis of the day or think that the world will collapse if I don't fix it myself in my own mind. You'll never be able to tune out the whole world and not know anything that's going on, but if I knew everything every day, I would have ended my life by now. I don't know about the rest of the world, but my world is better without my knowing. The rest of you have fun with this stuff.

Yep, I tuned out about 8 months ago. I had to for my own mental well being. It has helped immensely.