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WC MN | The hope is resting on the notion that China will come back and buy beans soon. Why should that affect futures price? Basis, perhaps, but we have swelling global stocks, huge domestic stocks, short term demand loss with the swine flu, and large crops coming from South America. Outside of a short term knee jerk reaction, why should we expect prices to rebound at all? It sounds like if the Chinese buy beans that they would go into state reserves. So we are taking them out of a bin and putting them in a different bin.
Perhaps I'm jaded, but the only way to have a significant rise in prices is for there to be supply destruction. With the MFP and any type of bounce to price beans at a decent price for 2019, that seems unlikely. Obviously weather trumps all, but we would need a major disruption in growing conditions to change the stocks outlook. | |
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