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NW Indiana | Just like $18 beans were way to high making rapid expansion of supply having long term effects, if price goes to low it will decrease supply efforts having long term impacts. During the ethanol boom I witnessed crazy amounts of capital spent to expand production. Similar to that impact and how it has created a long period of prices at or below cop, if we broke things to the other side it would likely impact operators in the same way creating to low of supply. We can always have fast moves to extremes based on market structure and panic but any kind of longer term price period that is drastically out of whack compared to fundamentals is unlikely. All that said the only way I see a path to much lower prices is if this trade war does become a real fundamental shift in production. Similar to the impact the ethanol boom had, a long term trade war with china could have a similar impact in the opposite direction. I'm just still in the camp that it is so far out of either sides best interest that I can't fathom it happening. I still am expecting some major Chinese soybean purchases in the near future. | |
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Chinese Buying Tremendous Amounts of Soybeans
