Sunday, April 7, 2019

Week 14 - U.S. Soybean Futures Rise

U.S. soybean futures rise over 1% weekly due to trade talks optimism and USDA report.

Chicago Board of Trade (CBOT) crop futures traded higher in the trading week ending on April 5, with soybeans adding over 1 percent, as the oil seeds were boosted by optimism over trade talks between the United States and China and also USDA report. May soybeans were up 14,75 cents, or 1,67 percent, to settle at 8,99 dollar per bushel.

China and the United States concluded in Washington the ninth round of high-level economic and trade talks which ran from Wednesday to Friday. China has been the world's top soybean buyer. Any positive development concerning the trade talks between the two sides will boost U.S. soybean prices. Also, in other news, the USDA projects soybean imports at 4 million tonnes in 2019-20, up from 3,5 million tonnes in 2018-19. Most of the imports will come from the United States, according to the USDA.

These optimistic news from both sides surge soybean price a little bit and ended up having a nice day. The bull spreads are working and once announcement of a trade deal between the U.S./China, then we could see the funds start to buy back some of their huge short position in soybeans. But at the moment, it will take a miracle to rally soybeans above $9,10 against May futures because there is still have huge supplies hence, the market will be reluctant to rally too much.

Now, as trade talk is almost at the final stage, should most Farmers Hedge now or consumers should rather buy now? Well, all things being equal, we may recommend consumers to buy now because it look like something positive will come out of the Trade Talk which will soar prices.



Sources:

https://www.world-grain.com/articles/11890-egypt-soybean-imports-surging

http://www.xinhuanet.com/english/2019-04/07/c_137956011.htm

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