Soybean, another trap?

November 18, CBOT January soybean futures rose 6 cents to 1,175.75 cents a bushel.
November 19th, the price of a major contract for soybeans in the Big Commercial Exchange rose to a maximum of 5388 yuan/tonne.
and global soybean stocks are the main driver of this wave of strong soybean prices.
, in order to ensure the yield of wheat, rice and corn, the space left for soybeans is relatively limited.
The United States, Brazil, Argentina, these major producing countries by the weather, the impact of the epidemic led to insufficient overseas supply, coupled with the delay in the domestic soybean market, insufficient demand and stable increase in prices all the way up, forming a "bean hard to find" tension.
this year's rise in agricultural prices is reminiscent of the 2007 food war.
in the previous article we also introduced, in foreign capital speculation food shortage, pushing up grain prices situation, China played a beautiful war of attack and defense.
domestic grain prices continue to rise, the national reserves of grain began to enter the market to sell storage.
china, with its ample grain reserves, has stabilised food prices by stabilising speculative capital pouring into the country.
food security, our rations are not lacking.
2019 White Paper on Food Security in China shows that China's wheat and rice rations are more than 100% self-seoty and grain self-seghing is more than 95%.
and really sensitive to our nerves is soybeans, an agricultural product that is closely related to oil, feed and meat prices.
As the country of origin of soybeans, China has been the world's most important soybean producer and exporter, since the reform and opening up, with the improvement of living standards, the development of China's soybean industry has formed a great change, due to the increase in demand for meat, China has gradually changed from a soybean exporter to the world's largest importer.
than 20 million tons of soybean production a year will struggle to meet the growing domestic consumption, more than 80% of soybean consumption needs to rely on imports.
2016 data on the Ministry of Commerce's website, China's soybean dependence rose from only 7% in 1995 to 60%-70% in 2005.
reached 86% in 2014-2015.
see such huge demand for soybeans in China, international grain traders are certainly reluctant to sell them at low prices.
at the beginning of this century, they began to act.
2001-2004, the U.S. soybeans from 415 to 1064 (cents per bushel) because of speculation about Chinese demand, while Chinese soybeans also followed the rise, leading to a large expansion of soybean farmers in the Northeast, domestic pressing capacity also increased significantly.
then from April 2004, domestic and foreign soybean prices plummeted, in just seven months, the U.S. soybeans fell from 1064 to 500, more than half of the waist.
prices of soybeans in China have also plummeted, with many soybean farmers losing money.
faced with high costs, many domestic fracking enterprises due to huge losses closed down, foreign investors take advantage of the large-cost acquisition layout, basically control China's fracking industry.
from raw material procurement pricing, to downstream product pricing, China's soybean industry is controlled by foreign investment.
2016, 64 of China's 97 large oil and fat enterprises were equity or controlled by multinational grain traders, accounting for 66% of the total share capital, and 75% of the market share of the oil and grease market was controlled by foreign investors.
this is a complete wake-up call, and we have since gained experience in larger battles.
when the 2008 financial crisis hit and soybean prices plummeted, China suddenly flooded its reserves.
china's strategy at this point: since domestic soybeans are unlikely to meet demand, it depends on huge reserves to stabilize market prices.
buy when the price is too low, and sell when the price is too high.
can be said that since 2008, although China's soybean imports more and more, but the domestic soybean prices are basically in a stable state.
when China's soybean reserves reach half a year or even a year's consumption, no one dares to fry.
china's population and arable land, China cannot make its staple grain and soybeans self-sufficient at the same time.
china's strategy is: the main grain must be self-sufficient, soybeans can rely on imports.
: Against the backdrop of a second wave of outbreaks, a multi-country blockade in Europe and a ripple on the global food supply chain, there are signs that those behind the rise in food prices are acting foolishly.
To this china has repeatedly reminded of the warning, indicating attitude, will strictly prevent speculative capital hoarding strange, hyped grain prices, disrupt the order of the grain market, will effectively maintain the market order.
addition, there are several other details.
July 2019, 5.87 million tons of grain and oil were sold at auction.
reached 22.45 million tonnes in July.
2019, 6.42 million tons of grain and oil were sold at auction.
reached 19.6 million tons in August.
September 2019, 970,000 tons of grain and oil were sold at auction.
reached 4.01 million tonnes in September.
statistics for October and November have not yet been released.
but looking at 19 years of data, 1.51 million tons and 490,000 tons were sold at policy grain and oil auctions in October and November, respectively.
The weekly auction volume of wheat rice reached 5.1 million tons in the first two weeks of this month, and 5.6 million tons in the third week.
the 2007 food war, 66 wheat auctions and 78 rice auctions were held from the beginning of the year to June 12.
strange and familiar with this scene.
source: Forward-Looking Network," "Analysis of China's soybean industry market status and regional competitive landscape in 2020", Voices of Great Powers, etc., China Food Network.