Soybeans are an important export for US-based farmers. Beans were the largest agricultural export of the United States in 2023, and comprised more than 1% of the total exports of the United States. Recent developments in trade negotiations from the Trump administration put pressure on China to expedite buying soybeans from the US. On Truth Social, Trump said that he hopes China would quadruple its orders. He also went on to say that there was a “shortage of soybeans” in China.
For context, we attached a bar chart which shows the annual US soybean exports to China. We can see that total exports compared to last year are down almost 50% and the general trend has been lower since Covid.
China is by far the most important customer for soybean farmers, making up more in export sales than every country in the world combined. That is a Goliath buyer, so we can understand why Trump is adamant about trying to meet some of the campaign promises he had for the farmers on both of his campaign trails.
Overall, with China slowing down on buying, price trends in soybeans have been flat to down for a little more than a year. However, we shouldn’t short-sell Trump’s ability as a deal creator. As seekers of truth and objectivity, it’s very important to stay as far away from both sides of political ideology as possible and counting our silver after a promise was made. However, we have seen Trump’s ability to leverage (weaponize?) the US consumer to win over favorable trade agreements.
The technicals paint a picture similar to the narrative. Sideways consolidation and basing, waiting for China to start buying again. The DeMark suite is constructive on helping out with timing on the higher timeframes. We have active weekly level 13’s which are holding risk levels. Furthermore, the daily chart continues to hold the all important ~10 level, which seems like some kind of price floor for political pressure and a price level where China seems to be buying at. My general assumption is that the market has spoken in this range and there is decent risk-reward against this zone with a tight leash.
