Soybean Prices

Soybean Prices & Media Tariff Hype

“Davidson” submits:

Soybean prices, tariffs? What is the truth to the current media football?

The facts are presented in the Trade Weighted US$ Major Currency vs. Soybean Prices history. From 1973, Soybean prices did not display a significant correlation with currency fluctuations. Starting in 2003 with the inception of computer-driven algorithm trading there is a strong inverse relationship. You will recognize a similar pattern in oi prices. Since 2003 US$ strength has forced commodity prices lower due to algorithmic trading while falling US$ resulted in higher commodity prices.

Soybean Prices

The recent tariff discussion has not as yet had any unusual impact on soybean prices different from the inverse relationship with the US$ in my opinion. US agricultural industry has experienced weaker pricing since Russia invaded Ukraine and the rise in terrorism and autocratic governments as global investors shifted capital to the US$ assets for safety. While some of this has reversed as the ISIS threat has diminished, the US$ still remains quite elevated vs. its historical trend.

Currently, the focus on recent Soybean price changes ignores the importance of the US$ relationship which remains the most influential for Soybean pricing.

If there is a tariff impact on Soybean prices, it is too small to separated from the normal volatility and inverse US$ correlation.

Don’t believe the media hype!!

LEAVE A COMMENT


X
Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Are you an intelligent investor?

ValueWalkPremium is a website and newsletter for smart investors like yourself. We focus on the latest hedge fund industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today for only a few dollars a day and get a 3 day no obligation trial with a targeted 20% discount coupon code.

Cancel anytime during trial and you are never charged.

Limited time offer: For first 50 subscribers

0