Want to know what’s happening in soybean markets? At times this year it seemed as simple as watching social media.
Soybeans in 2018 were a rough show to watch. Nearby futures started the year off in the US$9.50 range and quickly shot up to US$10.70 in the spring as seasonal weather concerns started to kick in. This isn’t unusual behaviour. We often see weather and production prospects in North and South America driving soybean values during various portions of the growing season.
It’s also not unusual for government policy to impact soybean prices. Think back to when biodiesel became an issue and demand for vegetable oil spiked. But this year government action caused an extreme amount of volatility in the soybean market.
The trade war between the United States and China resulted in a 25% tariff on US beans moving into China. That drove prices down hard in the US, while supporting soybean values in other exporting countries.
What has been most interesting to watch has been how Twitter has been impacting soybean markets in 2018. President Trump has tweeted several times that trade negotiations with China were going well. Soybeans would rally sharply, only to see a Presidential Tweet the next day deriding Chinese negotiators. Soybean values would drop quickly.
As 2018 draws to a close, we have some optimism in the air over a possible normalization of global trade in soybeans. Will it last? Only time – and Twitter – will tell! Stay tuned…