Soybean bears are again paying close attention as Washington talks about moving forward with an additional $200 billion in tariffs, perhaps as early as next week. The escalation of a trade war with the worlds #1 buyer of soybeans does very little to encourage or help incite a rally. There is also some negativity associated with comments from Chinese delegates who suggest their total soybean imports for 2018-2019 might be closer to 86 MMTs vs. the current USDA estimate of 95 MMTs .

Keep in mind, there was also another case of African Swine Fever discovered in eastern China, which is spooking the trade to some degree. Many sources are thinking the actually number of cases are being under reported. With China being home to almost half of the worlds pig population, just seeing them sneeze can cause many inside the trade to worry about wide spread contagion.

From my perspective, the much bigger concern is how long the trade war between the U.S. and China will last? I continue to hear comments circulating inside the trade that China has enough supply to make it through November, but December and January appear much more uncertain. In other words, they may ultimately have to purchase 12 to 15 MMTs of U.S. soybeans to bridge the gap until new-crop South American production can become available.

Here at home, the trade is trying to digest even more bearish news, as the well respected FC Stone pushed their soybean yield forecast from 51.6 to 53.8 bushels per acre vs. the USDA's current estimate of 51.6 bushels per acre. If this type of yield number is actually harvested, there's worry that it could push U.S. ending stocks north of a massive +950 million bushels. I still see more downside ahead...

The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.

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