US President Trump has long excoriated Chinese trade policy, portraying it as “unfair” to American manufacturers. Temporarily restrained by more laissez-faire-minded advisors, Trump began to ramp up threats of tariffs, which were eventually followed through on in early March 2018. US soybean farmers panicked, as they are keenly aware of the power China holds over their crops. Fifty-eight percent of US soybean exports were shipped to China in 2017, and retaliatory tariffs in China are likely to be very costly.
Soybean traders, on the other hand, did not seem as concerned. While the net position dropped by 99,398 contracts (42%) on corn futures over the past four weeks between March 13th and April 3rd, soybean futures dropped by only 28,345 contracts (14%) during that same period—indicating managed money’s relatively bullish view. Thus it appears that the fundamental dynamics highlighted by the US Department of Agriculture’s (USDA) Prospective Plantings report still hold sway over traders concerns. Released on March 29th, the report indicated corn and soybean planting intentions were down two and one percent, respectively. As sentiment continues to fluctuate, Gro Intelligence provides subscribers with the data and analytics necessary to stay ahead of the market.