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China sending mixed trade signals

A grain market economist is confused by recent trade tactics by China.

Ed Usset with the University of Minnesota says while any purchase of U.S. soybeans is positive, there’s also the recent arrest of a Chinese business executive in Canada.

“So we’ve got that kerfuffle at the same time, and boy the Chinese are good at sending mixed messages.  They follow their grief over (the arrest) with a purchase of soybeans and corn.”

He tells Brownfield it’s not that surprising China has been conservative since reentering the U.S. soybean market, leaving traders disappointed.

“The supply and demand situation in soybeans in particular is kind of onerous.  We’ve got a lot of soybeans from a good crop just harvested.  South America is working on another good crop (so) the world situation just isn’t that sunny.”

Usset says soybean prices have improved more than 60 cents since harvest and he recommends taking a hard look at old and new-crop sales.