When China Stops Buying . . . .

[errolanderson]

Chiina is the buyer of about 50 percent of all global commodities. From steel to copper to grain.

China right now is in an infrastructure boom. Everything is bright, shiny and new. Shanghai now dwarfs Vegas in glittz and lights.

But this clock is already ticking, just like in 2012, when China’s buying boom went bust. The last major commodity boom was 2008 to 2012. Then global commodities went into a slide for several years. Now this buying binge which largely caught the world off-guard . . . . .

Covid, weather and ASF impacting China’s hog production are all apart of the make-up of this buying spree. But this is a cycle like most everything in life and markets (IMO).

[bucket]

Do you believe they won't feed their people????

[TASFarms]

China is buying grain that isn’t even produced yet.

[shtferbrains]

If China has bought a large part of the inventory why whould they want it devalued?
If they get all they need why make it cheaper for the last buyers?

[Guest]

Oops , someone just addressed the elephant in the room
These are not stupid people
The fairy tale about the glut of food in the world has been blown wide open
They tried cancelling deals and price went up

[Rareearth]

And all the buying actually stimulates the demand and inflation to continue the infrastructure development.

[Rareearth]

Quote from Successful Farmer magazine (usa)

The current stock-to-usage figure (expected leftover supply at the end of the marketing year divided by usage) is near 3%. Historically, this low of a percentage suggests soybean prices above $15. Currently, soybeans are trading under $14 with continued strong weekly export sales.

Projected carryout is currently 140 million bushels, and some are debating it to be near 100 million. Is the U.S. on the verge of running out of inventory? At some point, one may question the U.S. exporting additional inventory when domestic supplies could become critically tight for our nation’s own food security.

[Partners]

Looks like China will own half the world when this shit show is over..

[sumdumguy]

When you realize that the carry out is in the 3% range, it quite dicey when a little drought here and there causes carry outs to go negative - could happen pretty easily.

[GDR]

Looks like China will own half the world when this shit show is over..

They maybe already do. Also heard on talk radio this am that there are 1.5 million CCP members impeded around the world in education, industry and government.

[errolanderson]

Quote from Successful Farmer magazine (usa)

The current stock-to-usage figure (expected leftover supply at the end of the marketing year divided by usage) is near 3%. Historically, this low of a percentage suggests soybean prices above $15. Currently, soybeans are trading under $14 with continued strong weekly export sales.

Projected carryout is currently 140 million bushels, and some are debating it to be near 100 million. Is the U.S. on the verge of running out of inventory? At some point, one may question the U.S. exporting additional inventory when domestic supplies could become critically tight for our nation’s own food security.

Agresource stateside is also suggesting $15 beans . . . . but the longer soy can’t test fresh highs, the odds drop. Rule of thumb (trader voodoo), 10 trading sessions without new highs tested suggest top is in.

[Rareearth]

Thanks Errol, good analogy or saying to remind us of risk.

Another quote from the article,
“As supplies tighten, volatility increases. Volatility provides opportunity, yet volatility also suggests risk. For producers, the opportunity comes in the form of higher prices. When analyzing the soybean market, one must wonder if the market has yet done its job to ration inventory.”

The USA has a reporting system for sales, Canada does not. Farmers in this type of market have a unprecedented disadvantage to understand this risks, and possible opportunities.

[GDR]

What's gonna happen if China starts flexing its muscle in Taiwan. Getting a bit tense over there. I can't imagine the west would just sit by and watch but if we get involved might be a big game changer.

[errolanderson]

What's gonna happen if China starts flexing its muscle in Taiwan. Getting a bit tense over there. I can't imagine the west would just sit by and watch but if we get involved might be a big game changer.

Good point, it can change trade patterns quickly, if this situation continues to heat.

[burnt]

What's gonna happen if China starts flexing its muscle in Taiwan. Getting a bit tense over there. I can't imagine the west would just sit by and watch but if we get involved might be a big game changer.

Not sure why you think the west wouldn't sit by and watch. With the world's super power being Beijing friendly now, n all?