Soybean bears continue to talk about headline risk surrounding Washington and possible trade retaliations from China. I respect the risk and concern but personally don't see it happening, especially with continued talk that the Argentine crop could end up sub-40 MMTs.
It's hard for me to understand how China will feed their growing demand with a short crop in Argentina? Yes, they can source more beans from Brazil, but I suspect that only amounts to an increase of +5 to +8 MMTs for Brazilian exporters. The USDA is currently estimating Brazil's exports will be 66.7 MMTs, when in fact they could be more like 73 to 75 MMTs.
At some point however the Chinese are going to need more soybeans from the U.S., it certainly doesn't appear they can afford fewer U.S. soybeans. Just my opinion, but as a producer, I understand I have to respect the risk it could bring, especially if this tit-for-tat turns into a shootout.
As a producer, I like our current position, feeling like I've reduced enough longer-term risk to let the cards fall where they fall during the next 12-months. If we catch some bullish momentum, I'm in a position to really let the bulls run...
As a spec, I feel a bit confused nearby, but know I don't want to try and navigate a short position, especially with the crop in Argentina being so heavily damaged and global demand being so strong. Buying deeper breaks might interest me in the days ahead.