"Trade War = Sub $9 Soybeans" - Analysts

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📉 Analysts Warn Soybeans Could Fall Below $9 Amid US/China Trade Tensions 🌾

Rabobank analysts warn that soybean prices could drop below $9 per bushel if a new US/China trade war erupts 🌍. They believe that China would retaliate with its own tariffs on US grains and oilseeds if President-elect Donald Trump proceeds with his aggressive tariff plan 💥. This could give Brazil an even stronger position in the Chinese market 🇧🇷, as they would likely benefit from reduced US soybean exports 📉. Spot-month CME soybean futures are currently trading near $9.80 🌱.

📢 Trump Denies Softening Stance on Tariffs 💬

President-elect Trump denied claims that he might adopt a softer approach to tariffs 📉. On Monday, Trump dismissed a Washington Post article suggesting that his tariff plan might focus only on sectors critical to national security 🛡️. This would have been a significant shift from the tariffs he promised during his presidential campaign 🔥, including a 10% tariff on all imports, 60% on Chinese imports, and 25% on Mexican and Canadian imports 🇲🇽🇨🇦. Despite the denial, US and European stock markets surged in response to the initial report 📈.

🌽 Funds Increase Net-Long Position in Corn 🌽

The Funds have substantially increased their net-long position in corn futures 🌾. According to CFTC’s weekly Commitment of Traders data, as of Tuesday, December 31, large money managers were net buyers of 58,000 corn contracts 📊. The net-long position now stands at 224,000 contracts, the largest since February 2023 📈. Funds were also net buyers of 29,000 soybean contracts and 12,000 SRW wheat contracts during the week 🌱.

🌧️ Weather Relief for Brazil and Argentina 🌎

Extended weather forecasts provide some relief for portions of southern Brazil and northern Argentina, which have been experiencing dry conditions 🌞. Both the Euro and GFS models agree that these regions will remain mostly dry through the next 10 days 📅. However, rain chances are expected to return during the 10-16 day period, with some normal rainfall possible between 15-28 days ⏳. This has impacted soybean meal futures, which closed lower on Monday and continued trading lower early this morning 🌱.

🚢 US Export Shipments in Line with Expectations 📦

US corn shipments were in line with expectations last week, with 847,463 metric tons (33 million bushels) inspected for export 🚜. However, this was 6.6% lower compared to the previous week and 22% below the same week last year 🌽. Soybean shipments came in at 1.3 million metric tons (47 million bushels) 🌱, down 22% from the prior week but up 23% compared to last year 📊. Wheat shipments exceeded expectations at 412,342 metric tons (15 million bushels) 🌾, up 22% from the previous week but down 18% from last year 📉.

🦠 First US Human Fatality from Bird Flu Confirmed 🦠

The US has confirmed its first human fatality from bird flu, a case involving an individual with underlying health conditions over the age of 65 in Louisiana 💔. There have been 61 human bird flu cases nationwide 🦠, although experts believe the actual number could be higher due to asymptomatic infections 🌍. The majority of cases have occurred among farmworkers in California and Washington who had contact with infected poultry or dairy cows 🐄. However, scientists have found no evidence that bird flu can spread human to human 🌐.

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