Battle for beans
Chinese soybean farmers, importers and processers say they are unconcerned about potential Chinese tariffs on American soybeans.
Two staples of the Oklahoma economy — oil and agriculture — are featured in this week's edition of Futures File, our weekly commodities wrap up.
Drumbeats of war send oil higher
Crude oil prices exploded to the highest price since 2014, gushing to $67.76 per barrel on Friday morning. The primary fuel for this rally was the rising tension in the Middle East as President Donald Trump considers military intervention in Syria.
Trump has threatened Syrian dictator Bashar al-Assad in response to reports that Assad’s regime again used chemical weapons against civilians. Assad is supported by Russia, which means that an attack against Syrian government troops could hit Russians as well, potentially resulting in an escalating military conflict.
Fears of a conflict spiraling out of control have traders on edge, especially since other major oil producers in the Middle East, including Saudi Arabia and Iran, have vested interests in Syria as well, making it a potential powder keg.
These fears are exacerbating an already-tight crude oil market. Globally, stockpiles of crude oil have been declining for the last two years after production cuts from major producers. In 2016, Russia and the Organization of Petroleum Exporting Countries (OPEC) agreed to reduce oil production to raise prices, a strategy that is finally paying dividends for oil producers as oil approaches $70 per barrel.
Farm aid on the way?
In the ongoing trade dispute with China, American farmers seem to be the most likely casualty, as China’s retaliatory tariffs have been aimed heavily toward U.S. exports of soybeans, pork and other agricultural products.
This initially prompted numerous farm groups to speak out against Trump’s recent trade actions against China, the second-largest buyer of U.S. farm goods. However, Trump has pledged to shield American farmers from harm and is proposing to create an aid package that could support farmers reeling from the trade dispute.
Additionally, the Trump administration seems to be revisiting other trade deals like the North American Free Trade Agreement and the Trans-Pacific Partnership to boost agricultural exports to our nonChinese trading partners.
Optimism about better trade prospects helped boost soybean prices to a five-week high on Friday morning near $10.67 per bushel.
Aside from trade, many Midwestern farmers are beginning to worry about the spring planting weather; cool, wet conditions could delay planting and reduce crop yields this year, a fear that is helping to boost soybean prices.
Opinions are solely the writers'. Walt and Alex Breitinger are commodity futures brokers with Paragon Investments in Silver Lake, Kansas. They can be reached at 800-411-3888 or www. paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.
Syrian children play Thursday in the courtyard of the 7th century Umayyad Mosque in Damascus, Syria. The streets of Damascus were packed with people Thursday evening either going out to shop in one of the city’s main markets to hanging out with...