Trump shakes up the soybean market

It has been relatively quiet on news from the White House. Trump changed that yesterday. A message from the American president about additional demand for soybeans from China caused quite a stir on the Chicago exchange. Corn and wheat saw little impact from the turmoil, although Trump also mentioned other agricultural products. The March contract for wheat on the Matif closed yesterday €0.50 higher at €193.75 per ton. At the CBoT, wheat slipped by 2 cents to $5.26¾ per bushel. Corn closed 1 cent higher on the Chicago exchange, reaching $4.29½ per bushel. Soybeans made a jumped sharply during the last trading session. The March soybean contract closed 2.5% higher, up 26½ cents to $10.92¼ per bushel. American President Donald Trump had a significant impact on the soybean market yesterday. On his own social media platform Truth Social, Trump wrote that he had an 'excellent phone conversation with President Xi of China.' The big news in Trump's message for the grain market is the additional import of American soybeans by China. 'China is considering purchasing additional agricultural products, including increasing soybean imports to 20 million tons for the current season (they have already committed to 25 million tons for the next season!).' The prospect of additional demand from China did not go unnoticed at the CBoT. During the trading day, soybeans rose by nearly $0.50. Some of the gains were given back, but a step of 26½ cents remains substantial. Some analysts warn that this rally carries risks. The positive sentiment on the Chicago exchange was not reflected in Brazilian prices. Compared to South America, soybeans from the U.S. are becoming more expensive. North America is pricing itself out of the market for non-Chinese destinations, according to some experts. Some analysts also point out that a message from Trump is not a contract yet. Until there are signs that China is actually buying additional soybeans in the U.S., he market should remain cautious. Especially since the soybean harvest is underway in Brazil, which is typically the period when prices are at their lowest. WeaknessCorn and wheat couldn’t really keep up with developments in the soybean market. Especially in the wheat market, there is little supportive news for the market. In the U.S., concerns about frost damage have largely subsided. In Eastern Europe, it is still cold, but minimum temperatures of minus 20 degrees are not currently an issue in Ukraine. This has led the market to assess the risk of additional frost damage in winter grains as somewhat lower. In the U.S., ethanol production last week was lower than the week before, at 281 million gallons compared to 327 million gallons. The cold that gripped the U.S. that week plays a role in the smaller ethanol production, according to some analysts. Due to the lower production, there has been a draw on the ethanol inventory, which decreased to 25.1 million barrels. Last year, the inventory was 26.4 million barrels this week.