Soybean bulls are arguing that U.S. conditions have deteriorated in some key locations and that perhaps President Trump is softening his tone in regard to trade negotiations with China, the world's top buyer of beans. There's also some indication that the spread between Brazilian soybean exports and U.S. soybean exports is widening to an extreme that could soon pencil Chinese buyers despite the added tariffs.
I still don't know if the Chinese buyers would be willing to take their chance on U.S. deliveries while their leaders are trying to negotiate and send a signal to Trump supporters. I'm thinking if you live in China you don't want to openly go against "the man". It will be interesting to see what happens if the spread gets more and more attractive?
Bears are pointing to the fact, Chinese officials have dropped tariffs on soybeans, soymeal, soybean cake, rapeseed, and fishmeal originating from places like Bangladesh, India, Laos, South Korea and Sri Lanka. Supposedly, this makes the Chinese look more serious about not importing U.S. soy and shows they are gearing up to look in other directions.
Bears are also thinking the trade will be digesting higher U.S. planted acres following tomorrow USDA report, probably closer to 90 million. I wish I had something fresh, new or enlightening to say, but it's still all about weather and Washington, where nothing has really changed all that much.