"Trade War = Sub $9 Soybeans" - Analysts

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0:00 Analysts are Bearish Soybeans
2:56 Trump Tariff Talk
4:25 The Funds
7:41 South American Weather
9:34 Grain Shipments
10:38 Bird Flu
Analysts Warn Soybeans Could Fall Below $9 Amid US/China Trade Tensions
Rabobank analysts warn that soybean prices could drop below $9 per bushel if a new US/China trade war erupts. They believe that China would retaliate with its own tariffs on US grains and oilseeds if President-elect Donald Trump proceeds with his aggressive tariff plan. This could give Brazil an even stronger position in the Chinese market, as they would likely benefit from reduced US soybean exports.
Trump Denies Softening Stance on Tariffs
President-elect Trump denied claims that he might adopt a softer approach to tariffs. On Monday, Trump dismissed a Washington Post article suggesting that his tariff plan might focus only on sectors critical to national security. This would have been a significant shift from the tariffs he promised during his presidential campaign.
Funds Increase Net-Long Position in Corn
The Funds have substantially increased their net-long position in corn futures. According to CFTC’s weekly Commitment of Traders data, as of Tuesday, December 31, large money managers were net buyers of 58,000 corn contracts. Funds were also net buyers of 29,000 soybean contracts and 12,000 SRW wheat contracts during the week.
Weather Relief for Brazil and Argentina
Extended weather forecasts provide some relief for portions of southern Brazil and northern Argentina, which have been experiencing dry conditions. Both the Euro and GFS models agree that these regions will remain mostly dry through the next 10 days. However, rain chances are expected to return during the 10-16 day period, with some normal rainfall possible between 15-28 days. This has impacted soybean meal futures, which closed lower on Monday and continued trading lower early this morning.
US Export Shipments in Line with Expectations
US corn shipments were in line with expectations last week, with 847,463 metric tons (33 million bushels) inspected for export. However, this was 6.6% lower compared to the previous week and 22% below the same week last year. Soybean shipments came in at 1.3 million metric tons (47 million bushels), down 22% from the prior week but up 23% compared to last year. Wheat shipments exceeded expectations at 412,342 metric tons (15 million bushels), up 22% from the previous week but down 18% from last year.
First US Human Fatality from Bird Flu Confirmed
The US has confirmed its first human fatality from bird flu, a case involving an individual with underlying health conditions over the age of 65 in Louisiana. There have been 61 human bird flu cases nationwide. The majority of cases have occurred among farmworkers in California and Washington who had contact with infected poultry or dairy cows.