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China trade issues hang over soybean markets

The White House could proceed with plans to impose tariffs on Chinese imports.

Soybean bulls are backpedaling as President Trump says he’ll confront China “very strongly” over trade in the coming weeks. Prices closed yesterday at their lowest level since late-August of last year. President Trump said in an interview that aired yesterday on Fox News, "China could be a little bit upset about trade because we are very strongly clamping down."

From what I can gather, The White House is going to proceed with plans to impose tariffs on $50 billion of Chinese goods. In return, China has vowed retaliatory measures, which makes the trade nervous. The final list of Chinese imports that will be targeted by U.S. tariffs is expected to be released either tomorrow or early next week, and planned investment restrictions and export controls will follow by month-end.

Here at home, weather has been widely cooperative. I should also point out, Informa raised its soybean acreage forecast by about +500,000,from 89.4 to just over 89.9 million acres.I am in full agreement, actually thinking our total planted U.S. soybean acres could be a bit north of 90 million. 

With weather and Washington both being played as aggressive bearish cards nearby, it's tough to talk about anything else. As a producer, I was an extremely aggressive seller on the rallies and am glad to be in my current position. In fact, I'm actually going to dip a toe in the water and start re-owning a few previous sales on the breaks. As a spec, I'm also initiating the first leg of a longer-term conservative bullish position. My plan is to cost average in on the breaks and hold for a play into the second-half of 2018.



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