“The United States is going to become the warehouse for global soybean supplies”

That’s a quote from Paul Burke, regional director for North Asia at the U.S. Soybean Export Council, in Time. He continues “This is the realization that we’re coming to within the trade within the last couple of weeks.”

The Chinese plan is — in addition to relying on Brazil and Argentina — to switch to other sources, like palm mill, rapeseed, sunflower seed, and other countries, such as Russia, Ukraine and Kazakhstan, for soybeans. Obviously, the development of other countries’ ability to grow soybeans will take time. But that was also true for Brazil.

There is some discussion that China might not need to rely on US soybeans even in the short term. From SCMP (August 2):

Ma Wenfeng, an analyst from Beijing Orient Agribusiness Consultant, said China had been importing far more soybeans than it really needed and could do without US imports in the short run.

Ma said farmers had been using more soybean meal than was needed in pig feed because there was so much available at low prices.

China imported a total of over 95 million tonnes of soybeans last year, while the demand was 63 million tonnes, he noted.

The “surplus” 32 million tonnes – which Ma defined as beans that were unnecessarily consumed – was close to the amount of imports from the US.

He said the use of excess soybean meal had meant farmers were using less corn meal and as a result the state reserves have plenty of corn meal that farmers could use to feed their animals.

Here’s a picture of cumulative Brazilian soybean exports over the years. Notice 2018 is higher than 2017, which itself was higher than in 2016.


Source: Karen Braun.

So, no wonder US soybean prices have not recovered, as some observers predicted, even as the new market year has begun.

Source: barchart.com.

60 thoughts on ““The United States is going to become the warehouse for global soybean supplies”

    1. pgl

      Pray tell – what else? Corn maybe. Of course a trade war with Mexico will lower demand for our corn. As usual – you speak before actually having any real facts. Which makes you the perfect economic spokesperson for Team Trump!

    2. baffling

      that may be true. but the question remains, will they take a loss on this years crop. and if so, how much?

    3. 2slugbaits

      PeakTrader It’s not as simple as that. What you plant next year is not independent of what you planted this year or the year before. For example, corn is a nutrient hog, so if you’ve planted corn the last couple of years, then you have to plant something like soybeans the next year. And soybean yields fall off with each successive planting. And if everyone switches to corn, then corn prices fall. Farmers have some flexibility in deciding which crops to grow each year, but that flexibility is very much constrained.

      1. PeakTrader

        Iowa farmers diversifying crops:

        “…diversify their crop mix, receive more income and avoid the price volatility that has squeezed profitability recently for corn and soybean producers can be enticing.

        “It’s a huge difference on prices,” said Rinehart, who had expanded his operation to grow an estimated 40 kinds of fruits and vegetables, along with conventional corn and soybeans. “We’re doing it for business. We don’t want to lose money. That’s why we’ve expanded the vegetable end of it, because you can kind of see what sells well, and those prices don’t drop like commodity prices.””

        https://www.google.com/amp/s/amp.desmoinesregister.com/amp/88569432

        1. 2slugbaits

          PeakTrader Did you even read the article? I suspect that you didn’t…just another mad google search. The article makes it quite clear that the fruits and vegetable market in Iowa is very small and would never be anything other than “marginal”. I’m sorry, but corn and soybeans represent 23,000,000 acres and fruit and vegetables represent 7,700 acres. Soybeans and corns are larger by a factor of 3,000!

          1. PeakTrader

            2slugbaits, you’re wrong as usual.

            And, if soybeans aren’t worth growing, many other crops can be grown.

            It’s been specialization and trade. Less demand for soybeans allows Iowa farmers to grow other crops.

          2. pgl

            He cannot read clearly. “if soybeans aren’t worth growing, many other crops can be grown.”

            We asked him to tell us what other crops should be grown earlier and he of course has not answered.

        2. baffling

          many fruits and vegetables have short shelf life compared to some of the grains and feedstocks. this could pose a problem if we get an oversupply of them as farmers move from soybean to such ag products. storage offers a buffer for soybean that may not be as flexible for fruits and veggies.

          1. 2slugbaits

            Yep. Growing and harvesting vegetables is also very labor intensive, which is a real problem in a state with a 2.6% unemployment rate. PeakTrader is just as clueless as ever.

          2. PeakTrader

            “The study from Iowa State University looked at what would happen if farmers in six Midwestern states — Illinois, Indiana, Iowa, Michigan, Minnesota and Wisconsin — raised 28 crops in quantities large enough to meet local demand. It found that if an ample supply of produce could be grown regionally, it would spur $882 million in sales, more than 9,300 jobs and about $395 million in labor income.”

            https://globegazette.com/news/local/article_19fba6ae-59c9-11df-b423-001cc4c002e0.html

          3. Noneconomist

            Bout time Iowa got into the citrus bidness. Maybe they get into grape growing and put the fear of God into those Napa Valley and Central California coastal wine snobs.

          4. 2slugbaits

            PeakTrader Once again you’ve resorted to some frantic google searches and once again you ended up making yourself look utterly foolish. Did you check the date on your article? It was May 2010…over 8 years ago. In case you didn’t know this, the labor market in 2010 was very different from today’s labor market. And did you notice that the main point was how little land it would take…one county out of ninety-nine. The point was how little farmland would have to be taken out of corn and soybean production in order to grow more vegetables. The article was NOT advocating a large scale shift out of soybeans and corn. Do you understand the difference between marginal changes and major changes? Switching a few acres here and there from soybeans to green beans might make sense on a small scale from one year to the next, but it’s never going to be a big player. The soil isn’t ideal for those kinds of crops, the climate isn’t ideal for those kinds of crops, and the infrastructure isn’t organized to support those kinds of crops. Iowa is not the Imperial Valley in California.

          5. PeakTrader

            2slugbaits, obviously, you didn’t understand the article.

            The higher income growing other crops, which they actually do and on less acres, can offset growing soybeans on more acres.

            Moreover, they can expand beyond the region, rather than shipping from California to New York, for example.

            Of course, you only focus on the negatives when you’re not changing positives into negatives.

          6. baffling

            peak trader, you are simply going to allow me to purchase strawberries and blueberries even cheaper next year. thank you. once again, you fail to properly account for how you will deal with an increased supply of an even more perishable crop. and i guess, since you advocate for the cutoff of poor labor immigrants, you will get some indian computer science phd to pick those fruits and veggies for you, eh? in aggregate, your ideas are simply conflicting.

          7. PeakTrader

            Baffling, that’s nonsense. I guess, you missed this part in the article:

            “California relies heavily on water and transportation subsidies to dominate fruit and vegetable production.”

            And, there’s a huge surplus of low-skilled labor, and a shortage of high-skilled labor.

            I guess, the conservative estimate of 11 million illegal immigrants aren’t enough for cover 10,000 additional jobs growing fruits and vegetables in the Midwest.

          8. baffling

            peak trader you are the one claiming nonsense
            “I guess, the conservative estimate of 11 million illegal immigrants aren’t enough for cover 10,000 additional jobs growing fruits and vegetables in the Midwest.”
            at the same time, you are advocating that we get rid of those illegal immigrants. so no, we will not have enough “illegal immigrants” to pick the produce. further, you think those “illegal immigrants” are going to show up in mass quantities in the red states that are trying to throw them out of the country? as i said, you are offering up solutions that are not compatible when examined as a whole. that is why sound bite policy making is a losing proposition. eventually, all of your policies will end up conflicting.

      2. ilsm

        I was stationed in Indiana in the late ’70’s. At the time the rotation in the area was corn, soybean and winter wheat, not sure what order. I suppose if the soybean prices stay low. rotation could change, if it is anywhere near what 40 years ago was. I assumed after combining the soybean chaff were plowed in leaving the nitrogen “nodules” in the roots as [part] fertilizer.

        I assume Agri-business has changed a lot since.

  1. pgl

    “The Chinese plan is — in addition to relying on Brazil and Argentina — to switch to other sources, like palm mill, rapeseed, sunflower seed, and other countries, such as Russia, Ukraine and Kazakhstan, for soybeans. Obviously, the development of other countries’ ability to grow soybeans will take time. But that was also true for Brazil.”

    It sounds like the world demand for US produced soybeans may take a permanent hit. And Team Trump calls this “winning”?

    1. CoRev

      Pgl, or your quote is a lot of Chinese negotiating propaganda. Efficient markets, and the market effects on these alternative feed sources, is not simple. Nor will they be available for replacement of this soybean harvest.

      A better indicator will be in the export numbers into next year. Has that 1/2 of the current harvest already forward contracted gone to Chinese sources? Some how I think this is already known by the administration.

      1. pgl

        Wow – you did not bother to read what Menzie provided before babbling on. It seems you and Peaky share this tendency.

      2. ottnott

        CoRev wrote:
        Pgl, or your quote is a lot of Chinese negotiating propaganda. Efficient markets, and the market effects on these alternative feed sources, is not simple. Nor will they be available for replacement of this soybean harvest.

        If they don’t get a handle on the African Swine Fever popping up around China, the pork eaters will have to start eating a lot of tofu and China won’t need alternative feed sources for pigs.

        I would agree that China wouldn’t be able to come close to finding enough alternatives to quickly fill the gap between the amount of soybeans they’d like to import and the amount they will import. I don’t think that means they will relent and import more from the US. The people of China have a very strong streak of Nationalism, and they will tolerate some sacrifice in the name of standing up for China in the face of US “aggression.”

        1. PeakTrader

          China is the aggressor.

          Stealing and coercing IP. Claiming almost all of the South China Sea and Taiwan. Exploiting its masses. Etc..

          Communist elites created a totalitarian state.

          1. ottnott

            PT wrote:
            China is the aggressor.

            Your opinion is irrelevant to how the Chinese people will perceive or react to the trade conflict.

          2. PeakTrader

            Opinions of the Chinese people are mixed.

            China uses its propaganda machine to discourage buying of foreign products, which it has done many times before.

            However, many Chinese producers and consumers, along with many academics, are unhappy and blame the Communist leadership.

            Nonetheless, China is still the aggressor. It wants to continue to cheat and steal.

          3. baffling

            so peak trader is not interested in fair trade. even a trade war is really not the end game. the end game is war, with the result that china capitulate to the demands and behavior deemed appropriate by the us? man, you really are living in the 80’s with your cold war mentality. your kind would actually start a physical war with china if given the opportunity. you are not interested in economic reform. you are interested in political reform of another nation.

            “Communist elites created a totalitarian state.”
            given the recent trump propaganda against freedom of expression, freedom of the press, market freedoms, doj use to attack political adversaries, etc. one could argue the republican elites are also trying to create a totalitarian state right here in the usa. that does not bother you peak?

          4. PeakTrader

            Menzie Chinn, it’s based on many articles, not just anti-Trump and pro-communist articles.

            What China has been doing in international trade is wrong, and needs to be corrected.

    2. CoRev

      Pgl, make this unsubstantiated conclusion: “It sounds like the world demand for US produced soybeans may take apermanent hit. And Team Trump calls this “winning”?”

      Other than his constant TDS driven Trump griping drivel, there are two other problems with his conclusion.
      Problem 1: There is no evidence that world soybean demand will diminish, just Chinese demand for US soybeans. If China shifts to sources from other countries, in the short run, 1 to 2 growing seasons, the US will be able fill that changed need, and at perhaps lower cost.
      Problem 2: Pgl’s use of permanent hit is an exaggeration. To be permanent the amount of growth of livestock and humans using soybean products in its various forms would also need to take a permanent hit, or humans would have to turn vegan in greater numbers. Oh, wait, that also increases soybean use.

      Soybeans are used for livestock feed because it is a complete protein and cheaper than most other combinations of supplements and feed-stock to make a complete protein in the volumes necessary to feed the world’s growing livestock inventory.

      Pgl’s TDS overrides both his logic ant Economics training, and that’s sad.

      1. pgl

        “Problem 1: There is no evidence that world soybean demand will diminish”.

        Seriously? I guess you have not paid attention to what has happened to be the market price for soybeans. Menzie puts this up a lot and you still do not get it? Just amazing. BTW – the rest of your comment was your usual gibberish so ain’t gonna bother with it.

        1. CoRev

          Pgl, your reading comprehension is failing, or too blurred by your TDS. My statement was: “Problem 1: There is no evidence that world soybean demand will diminish”.
          Your response was: “Seriously? I guess you have not paid attention to what has happened to be the market price for soybeans. Menzie puts this up a lot and you still do not get it?” You do know that the US is not the world don’t you?

          What I get is some economists should stick to their specialties, especially those NY finance types, who know little about Ag. economics. Those specializing in Ag. economics had this to say:
          “Global oilseed exports for 2018/19 are projected at 182.5 million tons, up 1.2 million with higher soybean exports for the United States and higher rapeseed exports for Ukraine. Global crush is raised 1.2 million tons to 501.8 million. Lower soybean crush for China and rapeseed crush for the EU are offset by higher rapeseed crush for Russia and sunflower seed crush for the EU, Russia, and Ukraine. With larger increases to supply than use, global oilseed stocks are raised 8.3 million tons to 119.9 million.” https://www.usda.gov/oce/commodity/wasde/latest.pdf

          You really should stop making vague, unsupported and misleading commentary showing your ignorance of others’ specialties.

          1. pgl

            More babbling. The clear fact here is that soybean prices have plummeted. You have no alternative explanation for the overwhelming clear fact. There are a lot of excellent discussions of the market factors that have led to this decline. And then there is your incessant babble speak offered here since you refuse to read and comprehend all of the other excellent discussions. Oh wait – these discussions are based on actual economic modeling that strives to understand the real world around us.

            OK you do not care about either economics or the real world. So please continue with your incessant and incoherent babbling if you must.

          2. CoRev

            Pgl, diverting is an interesting strategy but just adds to the impression of your ignorance. Your comment had little to do with this article and nothing to do with my comments about China’s alternative options.

            The remainder of your comment is just more face saving, trying to hide your ignorance. Please use logic and not bluster.

  2. Steven Kopits

    I had promised a review of the Milken estimates for excess mortality in Puerto Rico after Hurricane Maria.

    Please find it at the link below.

    Bottom line, for those on the island as of Sept. 1, 2017:
    For the Sept. 1 – Dec. 31, 2017 period, I estimate 1,439 excess deaths. as opposed to 2,098 for Milken
    For the Sept. 1, 2017 – Feb. 28, 2018 period, I estimate 1,525 excess deaths as opposed to 2,975 for Milken.

    Curiously, excess deaths from PROMESA austerity appear to come in around 2300 for the 2016/2017 period ex-Maria. Thus, by my count, austerity created 60% more excess deaths than the hurricane through year-end 2017.

    As usual, the supporting spreadsheet is at the bottom of the post.

    https://www.princetonpolicy.com/ppa-blog/2018/9/5/sl9dh24cg4ybqesnzx6ran1lskm8uv

  3. Bruce Hall

    If that’s truly the case, then the market pressures on soy producers and wholesalers is to expand new markets such as this: https://unitedsoybean.org/media-center/issue-briefs/industrial

    … or switch to other products which is a more likely outcome. … or wait until climate change destroys world agricultural output making surviving farmers very rich, which will happen never.

    There is no doubt that when you make a deal with the devil, you run a risk.

    Ask automobile manufacturers. https://money.usnews.com/investing/news/articles/2018-09-04/automakers-fret-as-china-clamps-down-on-capacity-seeks-consolidation

    In other “Made in China” news: https://www.reuters.com/article/us-northkorea-labour-china-insight/north-korea-factories-humming-with-made-in-china-clothes-traders-say-idUSKBN1AT00Q

  4. CoRev

    “The Chinese plan is — in addition to relying on Brazil and Argentina — to switch to other sources, palm mill, rapeseed, sunflower seed…” and corn meal. Alternative to what, soybean meal, which is used as the standard for comparison of pork feed for protein, and especially for Lysine, an essential amino acid, protein sub-component, for pig growth. There are many studies which assess the quality of these alternatives. Here is just one chart: https://projects.ncsu.edu/project/swine_extension/nutrition/nutritionguide/tables/table6.htm which shows tremendous increased weight amounts required to match soybean meal.

    Since most of us believe in efficient markets, alternative sources requiring serious increased, some times several times weight volume as soybean meal, is probably not going to be as cost effective as soybeans. The affect of these alternative replacements will influence markets for these alternative sources.

    This study, https://projects.ncsu.edu/project/swine_extension/nutrition/nutritionguide/protein%20and%20amino%20acids/protaa.htm, discusses several commonly used alternatives used in US pork production. It notes: “Can other alternative protein sources be fed to pigs?

    This section lists some of the more common substitutes for soybean meal in swine diets.
    Very often, these feed ingredients may appear to be economical compared to soybean meal. However, there are often many hidden costs or disadvantages in using these feed ingredients that are not reflected by their price. These include storage costs, anti-nutritional factors, product variability, fiber content, spoilage, and under-or over-processing. These factors are especially problematic in by-product protein sources. Because by-product feed ingredients tend to vary more in composition, proper information regarding chemical composition is necessary to ensure optimum pig performance. ” It then goes on to address several of the Chinese alternatives.

    Lysine is important to the balanced diet of pigs. The above reference also makes this statement: ” In diets for pigs over 50 pounds body weight, 100 pounds soybean meal can be replaced by the addition of 3 pounds L-lysine HCl and 97 pounds grain per ton. If the 3 pounds L-lysine HCl and 97 pounds grain are cheaper than 100 pounds soybean meal, the diet costs would be reduced by using supplemental lysine. In sow diets, 50 pounds of soybean meal can be replaced by 48.5 pounds of grain and 1.5 pounds of L-lysine HCl. ….
    Protein sources vary greatly in quality and quantity. Protein quality is directly dependent on the content of the most limiting amino acid relative to the pig’s requirement. If a diet is not balanced correctly, a shortage of one of the essential amino acids will reduce growth rate and performance. An amino acid imbalance may occur if a second limiting amino acid is added to a diet when the first limiting amino acid is still deficient. This will result in a reduction in feed intake and reduced pig performance. ”

    Translated, use of alternatives to soybean meal is not a simple 1 to 1 replacement in order to create a balanced diet for pigs and to optimize their growth. Either use of protein supplements will differ depending on the alternative used, or the amounts of the alternative used will differ.

    All of these feed alternatives can have an affect of feed prices and efficiency in producing pigs for the market. It’s not a simple matter, as their use may affect many components of the balanced pork feed.

    Are the alternatives really available in excess to be used in these revised feed formulas in a timely manner?

    1. Menzie Chinn Post author

      CoRev: The efficient markets hypothesis pertains to full incorporation of information into traded prices. But the market can be distored. In fact, the Chinese government can go full speed ahead on subsidizing Chinese production of soybeans, and subsidize setting up planting in other countries. Because the Chinese government is not subject to much democratic pressures, it can — if it wants — effect these measures with great alacrity (even if not cost-effectively). In other words, for the Chinese government, profitability of Chinese firms and cost-effectiveness of government interventions might be of tertiary importance. Personally, if my country had suffered the Opium Wars and their aftermath, experienced gunboat diplomacy and extraterritoriality, I as a leader might opt to stand up to what is perceived as foreign oppression, even if for the sake of domestic popularity.

      In other words, think about the payoff matrices for the leaders, not the countries. When you do that, I think you will see we are headed to trade war.

      1. CoRev

        Menzie, all those are possible Chinese strategies, and will take more than a year to implement. As I pointed out, what the soybean substitution target is not simple. If not substituting for soy, but expanding sources, then where, how to incentivize existing farmers to move to soy, how long to implement and how will the targeted Govt respond? And, that’s just a short list of the BIG risk factors for the expanding source strategy, what will the US be doing in that same period, the BIGGEST risk? In the end Chinese pork, and other soy-influenced products will suffer price rises masking them less advantageous.

        Isn’t negotiating a deal with the US less costly, more timely, and less disruptive? Asn’t China a rational decision maker?

        I thought you said we were already in a trade war?

        1. Menzie Chinn Post author

          CoRev: There is China, and there is Xi. There is America. And there is Mr. Trump. Xi is a maximizing agent, Trump is the other maximizing agent. I’ve laid out what I think the payoff matrix looks like, here. I expect we will be in a bigger trade war than we are now. And we will not be home before the leaves fall.

          1. CoRev

            Menzie, I agree if US/China trade negotiations fail, then: … we will be in a bigger trade war than we are now.” The world’s supply, prices and consumption of MANY agriculture products will have changed.

            An undiscussed alternative COULD be that OVER TIME the US would take over much of China’s supply of livestock production to the world. After all the US supplies one of the key components of current livestock feed.

            There are many, many still unforeseen impacts of a trade war.

          2. 2slugbaits

            CoRev I agree if US/China trade negotiations fail, then

            I think you misunderstood Menzie’s point. He wasn’t just describing the consequences of a bigger trade war, which you both agree would be very bad; he was referring to the incentives and response strategies in the payoff matrix. In other words, if both Xi and Trump are utility maximizers, then they will each choose a strategy that leads to a trade war.

          3. CoRev

            2slugs, thanks for your $.02. I believe Menzie’s matrix reference led to his conclusion: ” I expect we will be in a bigger trade war than we are now. ” with which I agreed.

          4. 2slugbaits

            CoRev A little more than 2 cents. My point was that you began with a conditional if/then statement: “…if US/China trade negotiations fail, then…”. Menzie’s payoff matrix was all about the high likelihood of a trade war, not its consequences. See the difference?

        2. CoRev

          2slugs, again thanks. Menzie and I were discussing an existent trade war: Me “I thought you said we were already in a trade war?
          Menzies’s response: ” I expect we will be in a bigger trade war than we are now. ” With this comment: “Menzie’s payoff matrix was all about the high likelihood of a trade war,…” you seem to have missed the thread of the discussion. Menzie and I both agreed we were already in a trade war, with Menzie thinking it could get worse.

          His matrix, although interesting, is reinforcement to that get worse alternative. Do you dispute, or want to refute or even just discuss my analysis?

    2. pgl

      “Since most of us believe in efficient markets”.

      I stopped reading right here as we know you have not read the seminal articles on efficient markets.

  5. PeakTrader

    If we’re at full employment, we wouldn’t be creating well over 100,000 jobs a month on average.

    Updated jobs report today (including revised June and July):

    This year, in January, we added 239,000 jobs; in February, added 324,000 jobs; in March added 155,000 jobs; in April added 159,000 jobs; in May added 223,000 jobs; in June added 208,000 jobs; in July added 147,000 jobs; and in August added 201,000 jobs.

    1. pgl

      It appears that PeakTrader is not aware that the employment to population ratio FELL from 60.5% to 60.3% during August. We may indeed may be at full employment but alas the Trump boom is basically nonexistent.

  6. pgl

    “If we’re at full employment, we wouldn’t be creating well over 100,000 jobs a month on average.

    Updated jobs report today (including revised June and July):

    This year, in January, we added 239,000 jobs; in February, added 324,000 jobs; in March added 155,000 jobs; in April added 159,000 jobs; in May added 223,000 jobs; in June added 208,000 jobs; in July added 147,000 jobs; and in August added 201,000 jobs.”

    Your first sentence is clearly wrong because if were even remotely correct, we would be seeing a significant rise in the employment to population ratio. Hey Peaky – try learning to check the entirety of BLS data before writing such silly statements.

      1. pgl

        Whatever Peaky. Now why did you fail to tell us that the household survey indicated employment fell last month. Oh that is right – your job at the White House is DISinformation. Never mind!

      2. noneconomist

        More RE: new Iowa fruit and vegetable crops to replace soybean dependence: Why not avocados? Other than climate, soil, and centuries of knowledge developed by California growers, why should those socialists be the only ones benefitting from increased demand for more guacamole? The new “farm jobs” created will be a further boon to the new Iowa economy as foreseen by PT.
        And then there’s your kiwi, your olives (and olive oil), your nectarines, your walnuts, your almonds. To paraphrase that great American former governor, Sam Brownback, “Look out California, here comes Iowa!
        Avocados! A shot of adrenaline into the heart of the Iowa economy!

        1. pgl

          “why should those socialists be the only ones benefitting from increased demand for more guacamole?”

          Even when I lived in Cali – I did not care for guacamole. But I LOVE strawberries. And the world’s leader in growing high quality strawberries are those California socialists! BTW Driscoll has gone international even taking its IP to China. Shhh – don’t tell PeakTrader!

  7. The Farm Dork

    Soybeans are fungible. Actually most oilmeals are fungible. It’s a big world, and US crops will find a market.
    Brazil et al are not going to increase production at these price levels.
    Holding the surplus in the US, if true, is a great idea. Prices are below long term equilibrium.

    1. Menzie Chinn Post author

      This Farm Dork: And yet the US-Brazil spread has proved durable, and futures, which many studies have verified are the best predictor of future soybean prices, have not recovered. So the data do not validate your assertions.

  8. This Farm Dork

    This issue started in April. It takes time for importers and trade houses to adjust their books. Let’s look at the US-Brazil spread in another six months.
    Futures prices are good predictors of short and medium term prices. Longer term, commodities are strongly mean reverting. Here’s a graph of World Bank soybeans adjusted for inflation (PCE) and the value of the $US (broad index). We are a little under the 30 year average now.
    http://thecommoditystrategist.blogspot.com/p/blog-page_17.html

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