IAG Blog Archives:

June 21, 2018 | |

Soybean Trade X China - What Moves If the Tariff Remains

  1. The US takes the Brazilian share of the non-Chinese imports.
  2. The US takes a portion of the soybean crush from Brazil. 
  3. Miscellaneous.

 

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    April 18, 2018 | | crops riskmanagement HRW

    IAG 2018 HRW Tour

    Approximate Route:

    Day 1 - Wichita, KS to Stratford, TX

    Day 2 - Stratford, TX to Liberal, KS

    Day 3 - Liberal, KS to Hays, KS through Wichita to Oklahoma City.

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    April 9, 2018 | |

    In These Trying Trying Times You DO Have Options

    Just as with regular climate, the financial climate is never easy to forecast. It’s tenuous and uncertain - at best. And just when you think the storms have settled, things can shift quickly.

    For instance, after Donald Trump imposed tariffs of $50 billion on imported Chinese goods, the Chinese government retaliated by announcing plans to match those tariffs with import levies on a number of U.S. products. Among these products are U.S. soybeans.

    With the uncertainty of global events that are beyond your control, it is becoming increasingly important to find alternatives to protect your income. Implementation of a strategy that incorporates options is a great way to hedge against these risks.

     

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    April 4, 2018 | |

    Soybeans - Tariff Response

    Two types of market responses:

     

    Emotional – Market has a large spec soy long. Response is negative – easy to say today.

     

    Logical:

    1. First: China does not trade corn or wheat – direct impact is none. Only impact to grains is indirectly from soybean values.
    2. Think of this as an additional freight charge.
    3. Freight differentials are absorbed in basis not futures.

     

    Old Crop US soy impact:

    1. US has shipped 25 MMT of 36 MMT we expected to sell to China.
    2. Balance (11 MMT) can be filled by Brazil and other SA suppliers. Not Argentina this year.
    3. Brazil has 20 MMT of exports to Non-Chinese destinations that can be shifted to China.
    4. US will move 11 MMT more soybeans to Non-Chinese destinations.

     

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