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Soybean Rises As China Expected to Curb Imports, Argentina Top Buyer

November 27, 2018 at 17:42 by Andrew Moran

Soybean futures are rallying after several industry reports were released on Tuesday, which were dominated by news surrounding China, the world’s biggest soybean consumer, and the US, one of the world’s largest soybean producers.

January soybean futures surged $0.13, or 1.51%, to $8.75 per bushel at 15:41 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean prices have shed roughly 1% over the last week, but they are still up more than 3% this month. Year-to-date, soybean has plunged 11%.

China’s soybean imports are expected to fall in the coming months as the nation’s African swine fever impacts farms across the country. Since August, there have been 70 reported cases, leaving large pig herd and saps demand for the animal feed ingredient to plummet.

But that does not mean Beijing will suffer from a shortage. According to the latest federal data, the country’s soybean inventories are close to seasonal records after the market still accepted US exports and turned to other producers for soybeans, primarily Brazil.

Since imposing retaliatory tariffs on US soybeans, American farmers have been decimated. According to new data from the Federal Reserve Bank of Minneapolis, the number of farms filing for bankruptcy is steadily increasing across the Midwest. In the 12 months that ended in June, nearly 100 farms have filed for bankruptcy in Minnesota, Montana, North Dakota, South Dakota, and Wisconsin.

Mark Miedtke, the president of Citizens State Bank in Hayfield, told CBS News:

Dairy farmers are having the most problems right now. Grain farmers have had low prices for the past three years but high yields have helped them through. We’re just waiting for a turnaround. We’re waiting for the tariff problem to go away.

This comes as US lawmakers are encouraging the federal government to do more for farmers. Representative Ralph Abraham (R-LA) submitted legislation to send financial aid to Louisiana soybean farmers. Although the US Department of Agriculture (USDA) is engaged in a $12 billion rescue package, Abraham feels that farmers should be paid based on “planted acres” rather than “harvested acres.”

But the pain that farmers are feeling may come to an end on a major report that found Argentina is now the largest buyer of US soybeans. After selling zero products to Argentina last year, the South American country bought 1.3 tons between September 1 and November 22. Despite processing its own soybeans to export meat and oil, Argentina is shipping greater volumes of raw beans and buying more from the US to feed its crushers.

In other agricultural commodities, March corn futures advanced $0.0175, or 0.48%, to $3.697 per pound. March wheat futures tumbled $0.075, or 1.46%, to $5.065 a bushel. January orange juice futures soared $0.27, or 1.93%, to $1.427 per pound.

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