The soybean market has bounced back from a fortnight’s worth of steady price erosion in a heartbeat after an uncharacteristically honeyed China-centric tweet from US President Trump loosely describing a “very good conversation” with Chinese President Xi Jinping ahead of the next face-to-face meeting between the US and Chinese governments in Argentina later this month. The rally at least in part testifies to US sellers’ desperation to hear that sales to China could still return after weeks of deteriorating overseas sales data which are pushing new crop total sales commitments further and further behind year-ago levels relative to this year’s record crop projection. With the Presidential diary full booked with pre-Midterm campaign appointments, the markets’ rally on professed warmer US/China trade relations will perhaps not coincidentally also come as a welcome boost to Republican electoral fortunes.
Trump has previously stuffed his Twitter feed with threats of retaliation should China “attack” US farmers. US soy sales to China have demonstrably suffered some of the worst fallout of the tit-for-tat tariff war between the US and China, with accumulated exports to China totalling just 271,000t in the last week reported, down from 8.5mn t at the same time last year. As recently as mid-September Trump was boasting that the US was under no pressure to make a trade deal with China while it sits back to watch Chinese markets “collapsing”.