The price of Soybeans
dropped from $10.11/bu in June 2018 to $8.11/bu in July 2018. It has recovered
by $8.53/bu as of 7/27/18.
China imports over 90
million metric tons of soybeans and Europe imports over 15 million metric tons
of soybeans. The other counties who
import soybeans include Mexico 4.3m, Japan 3.3m, Thailand 3.15m, Egypt 2.8m,
Indonesia 2.6m, Taiwan 2.4m others 26.21m.
China has a stockpile
of soybeans and doesn’t need to import soybeans at the rate they have been
importing. China’s tariff on US soybeans was an easy decision for China. They
were already increasing their production in China to reduce their own imports.
This soybean saga
gives us a good example of commodity trading. The buyers in this case can get
soybeans at $8.58/bu. and may be able to sell them for $10/bu. That’s a
one-time windfall profit for the buyers. The sellers will sell to at least get
something for their soybeans.
Soybean farmers claim
their break-even cost is $10/bu. and they find themselves selling their
soybeans below cost by $1.50/bu. The additional $12 billion support fund should
go to these farmers.
In 2017, global
soybean exports totaled 350 million metric tons or 12,859 bushels. One metric
ton of soybeans contains 36.74 bushels. The big producers are the US and
Brazil.
Norb Leahy, Dunwoody
GA Tea Party Leader
No comments:
Post a Comment