Why China's Soybean Tariff Changed Everything

[workboots]

https://www.zerohedge.com/news/2018-04-04/why-chinas-soybean-tariff-changed-everything

Any of the marketing guys wanna weigh in on this?

[Kinger]

Canola was down $2.50/mt this morning and finished $1.90/mt up.

Should help overall demand for Canadian soybeans at the least and hopefully canola as well.

Not sure how much of beans you can replace with canola. But they will likely try.

If China just taps into there own reserves of which there is very little concrete numbers on, it could turn into a very interesting waiting game. Similar to what they did with dockage in canola. Burn through there own stocks until they needed more.

But with egos and reputation on the line who knows exactly what will happen.

Stocking up on butter and popcorn either way.

[sumdumguy]

It depends if China likes Sieks and Some others.

[errolanderson]

The inclusion of soybeans is the nuclear trading game-changer. Soybeans exports are the key reason why U.S. GDP is still positive. If U.S. soybean exports are restricted, watch the U.S. economy head straight for recession. Also, soybean growing regions are Trump’s political heartland.

Remember, China is communist. The government pulls the strings on the standard of living.

Trump has shown more bark than bite. He has become a more predictable, unpredictable president to world leaders in my view. Suddenly, U.S. tariffs are now a discussion paper, which rallied stocks from a possible crash today.

[Rareearth]

Trump has a out though.

He will renew the ethanol tax credits, and increase the mandatory ethanol blend rates to 30% or higher.
The farmers will love him, make way more money with corn
Ethanol shareholders
Environmental green hats
Less foreign oil needs, global oil down
Fert prices up
Etc

Cattle market down, cheap feed

Plus all the other unintended consequences

[furrowtickler]

I found this interesting...

[LWeber]

[QUOTE=errolanderson;375391]The inclusion of soybeans is the nuclear trading game-changer. Soybeans exports are the key reason why U.S. GDP is still positive. If U.S. soybean exports are restricted, watch the U.S. economy head straight for recession. [QUOTE

The US GDP is 20,200 billion
U.S. Soybean total exports are 23 billion
US Soybean exports to China are 13 billion.
Take out beans and the GDP is still 20,187 billion.
They are not going to burn the beans - they still have value.
Beans were sold from the Gulf to Brazil today - the world has gone plumb crazy.
You can keep looking for the black swan for your recession - it won't be soybeans.

The US is adding interest debt at a rate of $6,000 a second. 13 billion would take 25 days.
That is the swan no one wants to talk about.

[AlbertaFarmer5]

[QUOTE=LWeber;375405]

The inclusion of soybeans is the nuclear trading game-changer. Soybeans exports are the key reason why U.S. GDP is still positive. If U.S. soybean exports are restricted, watch the U.S. economy head straight for recession. [QUOTE

The US GDP is 20,200 billion
U.S. Soybean total exports are 23 billion
US Soybean exports to China are 13 billion.
Take out beans and the GDP is still 20,187 billion.
They are not going to burn the beans - they still have value.
Beans were sold from the Gulf to Brazil today - the world has gone plumb crazy.
You can keep looking for the black swan for your recession - it won't be soybeans.

The US is adding interest debt at a rate of $6,000 a second. 13 billion would take 25 days.
That is the swan no one wants to talk about.

For those keeping score at home, that is .064% of US GDP. For perspective, I looked up a random market, the US retail coffee industry is 4 times that big. This is hardly even on the radar.

[Daylate]

I like that this is turning into a commodity forum again!

[sawfly1]

thanks for that prospective Larry