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Bulls are happy to hear China plans to buy more U.S. soybeans

Is it enough to keep the bulls buying and bears at bay?

Kevin Van Trump

February 1, 2019

1 Min Read
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There was some initial confusion, but from what I understand, China is expected to purchase another 5 MMTs of U.S. soybeans, on top of the estimated 5 MMTs they have recently purchased. Even though it's fantastic to see China back in the U.S. market, I'm just worried it might not be enough to keep the bulls buying and the bears at bay?

Keep in mind, Brazil has now harvested about 15% of their new-crop bushels and supply is moving to the ports and becoming more readily available. Meaning the window of opportunity for U.S. exporters is starting to more rapidly close. We certainly don't want to scoff at another 5 MMT purchase, but with the U.S. balance sheet busting at the seams it will still be tough to paint a bullish picture.

The good news is Brazil's crop has faced some weather headwinds. Rather than Brazil harvesting another new record, like the USDA was forecasting at 122.0 MMTs, it looks like their production is going to pull back to around 112.0 to 116.0 MMTs. Bulls are thinking there could be logistical concerns and restraints associated with getting the crop out of the country so perhaps U.S. exporters could see unusually late interest in supply, especially if the Chinese are trying to show good faith.

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

 

About the Author(s)

Kevin Van Trump

Founder, Farmdirection.com

Kevin is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. He also speaks internationally to hedge fund managers and industry leading agricultural executives about current market conditions and 'black swan' forecasting. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead. 

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