[Minnan.com]
Due to market concerns that the Sino-US economic and trade frictions continue, the agricultural product commodity market, which is most affected by economic and trade frictions, continued to fluctuate on the 13th, and US soybean futures fell to its lowest level in more than a decade.
On May 13th local time, the main soybean futures on the Chicago Futures Exchange fell below the $8 mark during the session, and finally closed down 0.6% to $8.04 per bushel, hitting the lowest level since December 2008 of $8.03, hitting a new low in 11 years and falling below the cost of planting.
What is the cost price of US soybeans?
More importantly, this has fallen below the cost line of US soybeans. "Most planting costs remain between 850 cents and 870 cents, and the lower 810 cents are also available, but the average planting costs are around 855 cents." Mou Qicui, an agricultural product analyst at CITIC Construction Investment Futures , introduced on May 13.
U.S. soybeans are piled up
Currently, US soybeans are facing multiple negative suppression of high inventory, setbacks in exports, and "big buyers" China's imports are diverted and demand weakened. More core is, how will China-US economic and trade consultations develop in the future? How to alleviate the export problem of US soybeans? This is the key to determining whether the turning point of US soybean prices can be established.
Trump throws a "check" again: $15 billion
Reuters html reported on the 514th that when U.S. President Trump met with reporters at the White House last night, he claimed, "This year we will buy $15 billion of agricultural products from American farmers. At the same time, the US government will formulate some reciprocity policies to make American farmers' lives better." Trump did not provide more details, leaving this $15 billion "buyback plan" only at the concept stage. This is also the second time he mentioned this plan in 3 days.
Last Friday night, Trump issued 10 pushes in a row, proposing a "curve farmer rescue" plan: the U.S. government can use a portion of the money earned by setting up high tariffs (he gave an example of $15 billion) to buy crops from American farmers, and then send these crops to poor countries in the name of "humanitarianism". By then, the United States will still use the extra money to invest in infrastructure , medical care and other fields.
But the response after this plan was proposed was poor.
The Trump administration proposed a $12 billion farmers subsidy program last year. As of the end of last year, according to Reuters, only more than $8 billion of the subsidy was implemented. " Wall Street Journal " pointed out on May 11 that the Trump administration has not settled the accounts yet. On April 29, the US Department of Agriculture extended the final settlement period to May 17.
Mennong: We should not give alms
In addition, some economists oppose this "buyback plan" on the grounds of "suspected dumping"; someMennong also believe that Trump has not fundamentally solved the problem. The US agricultural product market has been shrinking in recent years. Taking US soybean futures as an example, after seven consecutive years of decline, the current main contract price of soybean futures is about the fraction of the September 2012 high (1789 cents/bushel).
Reuters once pointed out that American farmers' income in the states of the United States' "agricultural belt" has been cut in half in the past five years. Now American farmers have a "gambler mentality" and want to avoid this wave of trade friction by storing grains, and wait until the price rises before selling the storing grains. In March this year, the granary storing warehouses in the United States have reached a historical high.
However, in the same month, many states in the "agricultural belt" suddenly suffered floods, with a total of 832 grain reserve warehouses affected, and the value of damaged grain was between US$17.3 million and US$34.6 million. With the destroyed houses, infrastructure, etc., the direct economic losses can reach US$3 billion.
In this regard, Bill Gordon, vice president of the American Soybean Association, said in an interview with the South China Morning Post, "We will not be happy with this type of subsidy (Trump administration) and we just want to restore the agricultural product market." He pointed out that it is precisely because of China that the US agricultural product market has only become bigger and bigger in the past 40 years.
On May 14, Tim Bardole from Iowa also told CNBC News, "We don't want to give alms, we want to grow the best crops in the world and sell them to all parts of the world. We want to make money in this way.""
But the current U.S. foreign trade policy is not conducive to the prosperity of the U.S. agricultural product market. According to data from the University of Illinois, American farmers who grow soybeans and corn have a harvest loss of between $50 and $100 per acre. According to the U.S. Department of Agriculture's own estimate, the U.S. soybean production will be reduced by 400 million bushels this year.
