The News & What it Means – Ontario Farmers Watching Plummeting Soybean Prices

By John DePutter – July 31, 2018

 

The news:

“Price (per) bushel down $2 since China slapped 25 per cent tariff on American soybeans…The cost of soybeans have dropped from about $10 a bushel to $8 a bushel over the past few weeks.”

– CBC, July 27, 2018

 

What it means:

Well, by the time the CBC gets around to catching wind of a farm market-related story, you know it’s very old news.

 

You also have to figure that by the time the CBC covers the story of a big market move, it’s far too late to plan ahead for it.

 

In fact, coverage of a bearish story by outlets like the CBC can sometimes be a signal that a major low is in place.

 

Farmers, grain traders and most market analysts knew months ago that soybean prices were profitable. They knew a trade battle might be ahead and that soybeans might be part of it. Most knew there was an opportunity to forward contract some new-crop (2018-crop) soybeans, in order to avoid getting caught selling into what could potentially be a lower market later in the summer.

 

The idea for farmers is to get ahead of the news. DePutter market advisory services helped farmers beat the bearish tariff news, by advising contracting new-crop beans before China’s tariff hammered prices.

 

For example, the Ag-Alert service which offers marketing strategies for Ontario growers made recommendations to incrementally sell new-crop soybeans on multiple occasions: One recommendation was sent in early March, another in mid-April, another in early May. Finally an advisory was issued in late May when some Ontario elevators were in the C$12.90 to $13.10/bu area.

 

Following the late-May peak, prices tanked and by mid-July soybeans in Ontario were trading under C$11/bu.

 

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