US domestic Soy prices have produced their highest close in nine weeks and their highest weekly percentage increase since March 27th.
The price increase is on the back of continued purchases of U.S. agricultural products by China. Committed to over 50 billion tonnes of purchases, China has come under fire for sourcing Soy from Brazil generating more aggressive rhetoric from the US administration regarding Beijing’s transparency of its handling of the COVID-19 crisis.
China and the US administration have refuted this with the US trade representative Robert Lighthizer stating that China bought $185 million worth of Soybeans last week.
Soybeans may have made a strong weekly gain with the price pushing 2.93% from the opening price of the week. However, the rejection candle on Friday with the Stochastic in overbought territory on the daily chart has market longs asking a question about further Chinese commitment to fulfil its obligations to the trade agreement.
Cynical? Maybe, but expectations are low that full trade obligations will be met.
To the trader on the ground, where politics is not always the driving force of a long futures purchase, there is a nagging fear that if the Brazilian Real starts to weaken this little buying spree will dry up as focus turns back to the south and leaves US soy stocks in the grain bins.
(FIS)