Why Hasn’t the Incipient Trump-Xi Deal Shown Up in Soybean Futures?

(In honor of reader CoRev), soybean futures for May…

Source: Barchart.com, accessed 4/7/2019.

Notice that as we get closer to May, the futures price converges to the spot. It’s looking a lot like markets do not expect the deal to effectively resurrect the fortunes of the US soybean market.

 

35 thoughts on “Why Hasn’t the Incipient Trump-Xi Deal Shown Up in Soybean Futures?

  1. Moses Herzog

    If you take 899 and divide by 1025, that’s about a 13% price drop. Then you have to ask how wide/thin are soybean farmers’ profit margins to begin with?? Let’s assume it’s some kind of a loss. How many years can you keep that up as a farmer??—and if you can survive, how much in government subsidies does that add up to year after year after year?? Again, all completely unnecessary.

    The American farmer has one man to thank for all of these losses and bankruptcies—donald trump. And maybe they are dumb enough to thank the man, just like the newly unemployed Harley Davidson workers were thankful to be unemployed as donald trump gifted all their jobs away to Thailand on a silver platter:
    https://www.youtube.com/watch?v=z5ki5Tt8tL0

    https://www.youtube.com/watch?v=fzPudyJcJMs

    https://www.youtube.com/watch?v=vH_IKov24-Y

    https://www.youtube.com/watch?v=k_zG8EM34L0

    Reply
  2. Barkley Rosser

    Yet more evidence of the inefficiency of markets due to asymmmetric information. Soybeans have turned into lemons, :-).

    Reply
  3. Moses Herzog

    I’ve heard many people say Donald Trump is a great judge of character. According to this, donald trump is a huge Roger Ailes fan:
    https://www.youtube.com/watch?v=B6X9GscLQtw

    Roger Ailes sure was a kind and warm man, always trying to help others:
    https://www.youtube.com/watch?v=CnzZrmF-5dw

    Also Roger Ailes was a man “genuinely concerned” over the well-being of his employees:
    https://www.youtube.com/watch?v=Q24Ml2rUhQs

    Similar to Stephen Moore, the former long-time CEO of FOX News was a man who believed deeply in the sanctity of marriage:
    https://www.youtube.com/watch?v=S_eItUJXW30

    https://www.youtube.com/watch?v=LKrGHGV7vng

    You might remember, the FOX News network, the company Rogers Ailes was the CEO of, for a near exact 20 years, is the same company that was and continues to this day lecturing “dirty liberals” about what “family values” are.

    Well, FOX News could apparently do one single solitary classy thing during the Roger Ailes and Bill O’Reilly fiasco. On his last day of work Roger Ailes was denied entry into the building where he had worked over many years.
    https://www.nytimes.com/2016/07/22/business/media/roger-ailes-fox-news.html

    But Rupert Murdoch says “it’s all nonsense”, so, never mind, “uuuuuhh” “uuuuuhhm” “uuuuuuhh” “uuuuhm”
    https://www.youtube.com/watch?v=ffHEHRA5h9g

    Reply
  4. Moses Herzog

    Normally I’m against referencing or putting much reliance in information where I don’t know much about the source or the author. But this video struck me as being so true and accurate I had to share it. Menzie, I should tell you there is no vulgarity in this video. You may or may not be interested to know Menzie, that Liberty University is mentioned twice in this video, the first of which is roughly at the 5:01 time mark of the video, so you can use the scroll bar to jump there if you so choose to watch it.
    https://www.youtube.com/watch?v=q2RFlwrjf20

    Most of the info in the video strikes me as being true, but it’s not the NYT or WaPo, so, you have to measure the reliability on your own.

    Reply
      1. Moses Herzog

        I’m not knowledgable enough on Germany to give a reliable opinion. However it’s interesting to note, China, the UK, and Italy are among Germany’s Top 6 export markets. This is one of the reasons (of many) I don’t see Brexit being as harsh as many people do. If Germany wants to slice off their own neck, they can “have at it”. I don’t see Germans as the masochistic types, but then again, in the early 20th century Germans were not renowned for their rational behavior.

        Reply
        1. Ulenspiegel

          Germany has around 8 to 10 “top export markets”. If a global recession occurs German exports will be hit, we will see a mild recession. However, with the current state of the job market, the very high employment and the demographic pressure the recession will very likely not produce political pressure on the German government. Therefore, posting m-o-m data without context is in my opinion a useless exercise. BTW: The y-o-y data for the first two months are positive.

          A hard brexit will cause a decrease of 0.2 – 0.3% of German GDP, it would be only a small contribution to the decrease of German GDP in 2018/19. The trade war and decreasing economic activity in China are the major contributions.

          “I don’t see Brexit being as harsh as many people do. If Germany wants to slice off their own neck, they can “have at it”.”

          The losses for UK will be much higher (4-5 times) than for most EU-27 countries, therefore, your argument does not really make sense.
          Concessions to UK come with a political price many EU-27 countries are not longer willing to pay. Why is this so hard to understand?

          Reply
  5. pgl

    ” It’s looking a lot like markets do not expect the deal to effectively resurrect the fortunes of the US soybean market.”

    Any deal with Trump has a short shelf life. Case in point: USMCA! Trump declares our border with Mexico will be closed for a very long time which in Trump World is about 4 days. While Romney is a jerk he was right about Trump being a “phoney and a fraud”.

    Reply
    1. Moses Herzog

      Romney is still pissed a public BJ in an upscale restaurant didn’t get him the Secretary of State job. Romney is so damned dumb and clueless he still hasn’t figured out even if donald trump had ever considered him (he never considered him, just enjoyed watching a man he trashed over months come and get down on his knees for him) that he would have lasted an even shorter time than Tillerson did.

      No worries though, the good little Mormon will let all the white incompetent sycophants like Stephen Moore fly through the nomination process and impede every black appointee he sees.

      Reply
  6. Samuel

    This is interesting. What I hear from ag commodity producers is that there is an oversupply of soybeans and, now, the price, has little to do with Trump. Although, I think he has reordered the soybean supply chain long term, most grain commodity producers still think he is taking care of them, via crop subsidies and bailout money. But, his support among dairy farmers may be dropping a little.

    Reply
    1. pgl

      What should it be? I guess you don’t believe in markets.

      BTW avocado prices are way up thanks to Trump’s promise to shut down the border with Mexico. I’m sure you are happy with that!

      Reply
    2. Moses Herzog

      Don’t worry “JBH”, your “dear leader” donald trump will provide government subsidies to the soybean farmers (what we call welfare in disgusted tones when it goes to blacks and low-icome people). Welfare that President Obama never had to give them, because President Obama never shutdown large export markets for USA farmers.

      Those government subsidies [ WELFARE ] that go to soybean farmers will be paid for with your tax dollars and/or a deeper federal deficit. But don’t you worry “JBH”, don’t you worry now. Republican lawmakers only think deficits are horrid when a Democrat is in the White House—so you can go back to your 6 hour daytime nap now.

      Reply
  7. CoRev

    Menzie, keeps throwing chum into his blog soybean articles article. His chumming is based upon this: ” Conclusion

    Soybean futures are remarkably good predictors of future spot prices of soybeans. Hence, my best guess of soybean prices one year from today is 872. …
    This entry was posted on July 15, 2018″

    What has happened to the soybean futures prices after his prediction? 3 months (mid October) ~9.30 up 8%
    Today (April 8 ~Noon) ~9.02 still up ~5% Data estimated from https://quotes.ino.com/charting/index.html?s=CBOT_ZS.K19&v=d12&t=f&a=50&w=1

    Where will the soybeans futures and spot prices be next July 15? Menzie’s $8.72 spot????

    One thing is certain Is I have been in Menzxie’s head since last Summer. 🙂

    Reply
    1. pgl

      What a load of rubbish. You have polluted this comment section with all sorts of BS that you now deny? Or maybe just maybe there is another CoRev who keeps writing the incessant rubbish. If so – could you please tell him to stop embarrassing you!

      Reply
    2. pgl

      We have to wonder if CoRev even knows the difference between spot prices v. future prices. He provides this quote from Menzie:

      “Soybean futures are remarkably good predictors of future spot prices of soybeans.”

      CoRev in his desperation tries to show Menzie’s forecast of a SPOT price by not showing spot prices but rather future prices. Lord – the stupidity of this troll BURNS!

      Reply
    3. pgl

      Now if CoRev wanted to make a smart and honest contribution (OK, I’ll wait until you recover from falling on the floor laughing), he would provide a chart of spot prices for soybeans:

      https://www.macrotrends.net/2531/soybean-prices-historical-chart-data

      Not nearly CoRev’s $9.30 per bushel. In fact the actual spot price was only $8.50 per bushel which was a bit lower than the future spot price that was Menzie’s best forecast way back then.

      One would think someone might tell CoRev to stop embarrassing himself this way but maybe CoRev is simply not listening!

      Reply
      1. CoRev

        Pgl, please, please stop embarrassing yourself. Why would I provide a spot price chart before July? What part of this quote did you not understand? “Soybean futuresare remarkably good predictors of future spot prices of soybeans.”

        Oh never mind you have embarrassed yourself so may times its become tiresome. Only a big city liberal can have completely misunderstood the soybean farming issues so badly. Remember how clueless you were abut the income factors in the “breakeven” costs discussions?

        Reply
        1. pgl

          “Why would I provide a spot price chart before July?”

          Simple – because you clearly have no clue what any of this means. QED!

          Reply
      2. CoRev

        Pgl, again shows his ignorance. My ~$9.30 was from Menzie’s provided bar chart. Since it is not precise on either date and price, I approximated. Where did you get your data? Other than your own ???

        Regardless the issue is not spot prices today or yesterday, but the futures AND SPOT prices on July 15, 2019. Perhaps you’d like to pull your TODAY’S July15, 2019 SPOT PRICE estimate from your same dark and remote source. At least Menzie went on record with his prediction.

        Pgl, please, please stop embarrassing yourself.

        Reply
    4. Moses Herzog

      @ CoRev
      CoRev, you may have provided one great service to this blog, and yeah, a service to Menzie and a large portion of the “dirty liberals” who read this blog. Your service to this blog is providing a realization that even after all the blasphemous and nation damaging things donald trump has done in office, there is still a significant portion of this country that still likes donald trump and a significant portion of this country that likes him even more than when donald trump first took office and a significant portion (maybe a majority) who will vote for donald trump again.

      Many “dirty liberals” read the newspaper and the better websites, and as they read all the damaging things donald trump does to America, the Constitution, and damage he does to “the checks and balances of power” in this nation, say to themselves, or even say out loud “Now they will all see what a horrible leader trump is, now they will see, now they are sorry they voted for him. donald trump has cooked his goose now. tick-tock-tick-tock-tick-tock”

      But CoRev, do you know the great service you have provided Menzie and many of the “dirty liberals” who visit this blog?? You have made them more aware of the reality, that there are many many many white trash illiterate voters “out there” in rural America. Some of them women even [ OMG!!! ] , and that the “dirty liberals” best gird themselves and brace themselves, for another 4 years of this desecration and abomination arising from an orange colored HELL.

      Reply
    1. pgl

      People being responsible is worrisome to Princeton Stevie Boy? Seriously? Many in Ireland wait until 30 to get married. I guess you want Japanese lads gong around having unprotected sex with just any easy chick they can find.

      Reply
  8. Moses Herzog

    I know this is way off-topic, but I thought in light of the recent Alan Krueger situation Menzie would not mind. I think this was basically “caused by” the concussion. In my subjective opinion, it took a girl who was already “somewhat susceptible” to this from difficulties with social skills and social phobia and the concussion was the tipping point. Obviously just a guess on my part:
    https://www.nytimes.com/2019/04/08/sports/kelly-catlin-suicide-cycling.html

    Reply
  9. Willie

    The gyrations of commodities are more mirrors than anything else, in my estimation. Lumber prices are down, which is because construction has probably peaked and won’t be driving the cycle now and timber industry ramp-up to feed demand that was there, but is tapering. Soybean prices may reflect a glut due to new sources that came online due to the threats of embargoes. The glut will be there for a while, and there’s no reason to believe Brazilian farmers won’t keep planting soy in the foreseeable future.

    Another example from my world is the price of OSB sheet goods. It’s commonly known as flake board and is a cheaper competitor to plywood for building sheathing for those of you who are not construction knuckle draggers like I am. Shortly after the 9/11 attacks, the price of OSB shot through the roof. The price stayed above plywood for several years. The government had specified OSB for crates to ship military gear because it was cheaper than plywood. Until it wasn’t. Then the government continued to buy it, because that’s the specification that was written and didn’t get changed when prices changed.

    Reply

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