In June last year, the price of soybeans reached a yearly low of $9 per bushel. It then started moving up and in April this year, the price moved up to $10.76 per bushel. After that, the price of the crop fell sharply to a YTD low of $8.13. It is now trading at $8.36.
Soybeans is a very important crop especially in the United States and China. The US is responsible for more than 38% of the total world’s supply of the crop while China is the biggest consumer. Chinese weather and soil are not ideal for the production of soybeans. The little that they produce is responsible for 7% of total consumption. Other major producers of soybeans are Argentina and Brazil.
Most of American soybeans are produced in the middle parts of the country where the weather and flat plains make its farming ideal. The main states producing soybeans are Illinois, Oklahoma, Nebraska, and Iowa.
The US being the biggest exporter of soybeans and China being the biggest consumer makes the plant very important in trade negotiations. When the US imposed tariffs on Chinese goods, the Chinese government imposed tariffs on American soybeans and other crops. By doing this, the government wanted to hurt the US president, who received a lot of support from the Middle America.
The trade war has led to the collapse of the price of soybeans as China starts exploring new sources. A week ago, a Chinese official said that the US might not be able to recover market share because China will explore alternative countries.
As shown below, the price of soybeans is trying to establish a double bottom position. This means that a rally could happen when the price reaches $8.17.
The post A Rally in Soybean Price Could Start as Harvesting Season Nears appeared first on Forex.Info.
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