China halts soy bean imports amid trade tensions
- Thread starter Cuddles
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Pile on the bad new , my SPY puts from yesterday need a bloody Friday
ok.
China halts US soya bean imports --> soya bean price goes up.
futures price has been rising since 28 May 19 from 840 to 890
?? I don't trade futures, but the news cycle is usually a few hours slow from the rumor mill.
China is shooting itself in the foot by halting soybean imports. Soybean is not just an agricultural product anymore; it's one of the most important inputs for both agricultural and industrial usage. Especially if China is not importing animal meat products from USA anymore, it needs to grow its own livestock and it needs to import soybeans as soybean is the most important livestock feed. There is not one country that produces soybeans more efficiently than USA. If it stops importing soybeans from USA, it's either going to have to pay more and get less from other countries or grow it on its own soil, neither of them good alternative solutions.
I hope China is not this stupid or this is just a stupid rumor.
I hope China is not this stupid or this is just a stupid rumor.
Yes with added transportation cost shipping all the way from South America that's absolutely wonderful or from India that currently only produces 3% of the world production of soybeans.
Like I said,
Not that easy to "take that market". LOL
Brazil has a lower labor cost to make up for transportation costs and don't have a 25% tax attached to it. I posted multiple years to show an upward trend of market cap from competing countries. I'm sorry you couldn't make such an simple connection. You actually think China is paying more for Brazilian beans don't you?
https://www.farmprogress.com/story-brazil-vs-wins-low-price-battle-17-133388
Financial edge
Even so, financing may be the area where U.S. farmers take the lead. Once Brazilian producers began tallying up their new, higher production costs, they may need to make a call to the bank, which won't likely offer much encouraging news. Under the Ministry of Agriculture's austere seasonal crop plan, there's less money available for cropping loans. And farmers are going to have to pay more for what's there. Only about $58.8 billion has been set aside for low-interest ag loans this season, versus some $69.6 billion for 2014-15, based on the mid-July exchange rate in 2014.
Facing a shrinking economy, Brazil is setting some staunch budget cuts — even to the extent of cutting money for agriculture, a sector that is estimated to account for an annual trade surplus of $76 billion.
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Some midsummer numbers from the Mato Grosso institute for projected 2015-16 costs make that much clearer. If institute specialists are right, it will cost Mato Grosso farmers $364.19 to produce an acre of 2015-16 soybeans, including land, labor and everything else. Out of that, $37.90 is their per-acre land cost — down from $51.70 last season, and $58.63 in 2012-13.
Related: Brazilian consultant sees bigger soy crop coming
Depreciation on buildings and machinery is $17.01 per acre of that total per-acre cost, with maintenance and insurance barely registering on the scale, at 26 cents per acre. Land costs for farms closer to port infrastructure, like Parana state, will no doubt be higher, but in compensation, Mato Grosso producers receive less for their beans at any price due to distances traveled to and from the farm gate.
Meanwhile, 2015-16 fixed costs for U.S. farmers make it harder to weather a price storm like the current one. David Asbridge, at NPK Fertilizer Advisory Service, says it will cost a total of $472.13 to produce an acre of soybeans in 2015. Out of that, $301.88 goes to fixed costs, like machinery, equipment and land. Iowa State University showed total cost of production in 2014 was $557, while University of Illinois projects 2016 soybean costs on highly productive central Illinois ground at $653 per acre, likely due to high cash rents.
Asbridge points out that some U.S. farmers who came to an agreement on cash rents back when prices were higher are likely to face extra difficulties lowering costs in the new-world price order. Cash rents for farmland in Brazil are nearly unheard of. Rents are most often paid according to the value of a bushel of soybeans on a given day each year, so that the landowner shares the price risk with the tenant.
Give this one to the Brazilians.
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